The country’s exports of goods showed good growth in the first half of the year, but corporate profits were generally squeezed. Judging from the data, textile and clothing exports overall showed a good and healthy growth trend, still growing by 12.8% under the influence of a high base. All traditional bulk commodity exports achieved double growth (compared to the same period in 2020 and 2019). During field surveys, companies generally reported that there were sufficient orders on hand and factory operating rates were full.
However, corporate profits have been severely squeezed by the fluctuation of the RMB exchange rate, skyrocketing sea freight, and rapid soaring import prices of raw materials and semi-finished products. Ocean freight has doubled compared with last year, and it is difficult to find a container, which has led to a significant increase in transportation costs for enterprises and an increase in the probability of default. As of the end of July, rising freight rates and port congestion have not been fully alleviated, becoming the biggest uncertainties affecting exports in the second half of the year. The price increase of upstream raw materials caused by global inflation has not been transmitted to the sales price of downstream finished products. In the first half of the year, the total export price of knitted garments dropped slightly by 0.8% year-on-year. In the domestic market, in the first half of the year, the national industrial producer price increased by 5.1% year-on-year, with clothing falling by 0.9%. Instead of rising, it fell. The overall level of consumer prices across the country increased by 0.5% compared with the same period last year, and clothing prices remained unchanged. Under the impact of the two sides, downstream garment enterprises, especially small and medium-sized enterprises, are in an unprofitable or even loss-making situation.
Excluding sudden uncertainties, the probability of slight growth in exports throughout the year is relatively high. Looking forward to the second half of the year, the continued growth of the world economy and China’s economy will provide driving force for exports.
According to the IMF’s latest forecast of global economic growth, global economic growth will reach 6% this year, the highest growth rate in the past 40 years; next year it is expected to reach 4.4%, significantly higher than in 1990 The average growth rate of the world economy since then. Among them, the number one engine driving global economic growth is still China. Due to China’s remarkable performance in fighting the epidemic and rapid resumption of economic activities, the IMF predicts that China’s economic growth rate will reach 8.4% this year, which is higher than the target of more than 6% set by the Chinese government.
Although it is difficult to say that the global epidemic will reach an inflection point in the second half of the year, it is expected to be further alleviated as the scope of vaccination continues to expand, and consumption continues to recover, driving demand in key markets to rebound and promoting Global trade grows. In addition, there are still opportunities during the epidemic. It is reported that the epidemic situation in Vietnam has become serious again recently, and the government has adopted isolation measures, resulting in a decrease in local production capacity. Some orders have returned to China and are undertaken by our companies, which is good for exports. It is expected that textile and apparel exports will maintain a steady and positive development trend in the second half of the year, and there is a high probability of performance exceeding expectations.
Due to the large base in the same period last year, from the overall export data, exports in the third quarter are expected to be in a declining range, and the decline will be larger. However, key commodities, including clothing and yarn , fabrics and home textile products have a high probability of achieving double growth. As the proportion of anti-epidemic materials fell in the same period last year, the decline in exports in the fourth quarter of this year will rapidly shrink, and may even return to flat or growth.
Excluding the impact of unexpected events, it is initially expected that exports will achieve slight growth throughout the year. If the existence of uncertain factors is taken into account, such as large fluctuations in exchange rates, floods in Henan, and repeated epidemics in Europe and the United States, it is more likely to be the same as last year or to decline slightly.
The trade volume in the first half of the year increased by 13.8% year-on-year
In the first half of 2021, the national textile and apparel trade volume was US$157.09 billion, year-on-year. grew by 13.8%, accounting for 5.6% of the country’s total trade volume. Among them, exports were US$143.39 billion, an increase of 12.8%, an increase of 15.6% over the same period in 2019, accounting for 9.44% of the country’s total exports; imports were US$13.7 billion, an increase of 25.6%, an increase of 13.3% over the same period in 2019, accounting for 1.1% of the country’s total imports. ; The cumulative trade surplus was US$129.69 billion, an increase of 11.6%, an increase of 15.8% over the same period in 2019, accounting for 51.6% of the country’s total trade surplus in goods.
In June, the textile and apparel trade volume was US$30.56 billion, a year-on-year decrease of 1.7%, an increase of 15% compared with the same period in 2019, and a month-on-month increase of 13.1%. Among them, exports were US$28.28 billion, down 3.7%, up 15.1% from the same period in 2019, and 13.8% month-on-month; imports were US$2.28 billion, up 30.9%, up 13.9% from the same period in 2019, and 4.9% month-on-month. The trade surplus for the month was US$26 billion, a decrease of 5.8%, an increase of 15.2% compared with the same period in 2019, and a month-on-month increase of 14.7%.
Cumulative exports declined in the second quarter
Since the second quarter, the monthly export growth of textile and apparel has gradually declined. Exports in May fell by 16.8%, and exports continued to decline in June. , but the decline was significantly narrower than that in May, only 3.7%. Compared with the same period in 2019, it still maintained rapid growth.
Cumulative exports in the second quarter were US$76.93 billion, a year-on-year decrease of 4.9%. Textiles were the main cause of the decline. The cumulative exports of textiles decreased by 27.9% year-on-year and increased by 17.2% compared with the same period in 2019. Clothing maintained a good performance Growth trend, cumulative exports increased by 35.7% year-on-year, and increased by 10% compared with the same period in 2019.
The four major markets have different performances
The four major markets of the United States, the European Union, Japan and ASEAN together account for 55% of our exports %. In the first half of the year, our exports to the United States and ASEAN maintained relatively stable growth, while growth to the EU and Japan slowed or declined.
As demand graduallyTo a certain extent, it forms a retaliatory growth.
Yarn export volume increased by 48.8% and 1.9% respectively, and fabric export value increased by 48.6% and 4.7% respectively.
The proportion of anti-epidemic materials in exports has fallen rapidly. In the first half of the year, the combined exports of medical masks and protective clothing accounted for 6.3% of total textile and apparel exports, falling rapidly from 22.4% last year. Among them, the proportion in June has dropped to 4.05% (the proportion was 2.5% in 2018 before the epidemic and 2.7% in 2019), which is in huge contrast with the proportion of 54.2% in May last year. The impact of epidemic prevention materials on the overall export trend has gradually weakened, and textile and apparel exports will further return to a pattern dominated by traditional bulk commodities in the second half of the year.
Note: Masks and protective clothing are based on the statistics of China Customs HS 8-digit code, and the statistical caliber Slightly larger.
Exports from major provinces and cities all grew rapidly
In the first half of the year, the top five exporting provinces and cities all achieved rapid growth, with the exception of Guangdong. In double digits, Zhejiang, Jiangsu, Shandong and Fujian grew by 18.9%, 11.7%, 28.5% and 35.7% respectively. The growth rates in Hebei, Jiangxi, Xinjiang and other places all reached or exceeded 50%.
By geographical region, the eastern region is still the main force driving export growth. In the first half of the year, the eastern region’s cumulative exports increased by 13.9%, and the western region increased by 30.7%. The central region fell back from last year’s high base. down 2.9%.
The import prices of bulk commodities rose all the way
Unlike the growth rate of exports that fell back after entering the second quarter and showed negative growth for two consecutive months, textile and clothing imports have since It has maintained rapid growth for four consecutive months since March, with the growth rate exceeding 30% from April to June. It drove the cumulative import growth in the first half of the year to 25.6%, far exceeding exports. Affected by the epidemic, international mobility has been significantly reduced, foreign purchases have stopped, and domestic consumers’ pursuit of foreign clothing and accessories has driven the rapid expansion of clothing imports.
In the first half of the year, clothing imports increased by 55.1%, driving overall import growth by 19 percentage points. The proportion of clothing in imports further rose to 42.5%, an increase of 2.4 percentage points from 2020 and an increase of 6.2 percentage points from 2019.
Textiles increased by 10.2% cumulatively, of which yarn, fabrics and home textiles increased by 44.2%, 14.9% and 29% respectively.
Rising prices are an important factor leading to the growth of imports. Among clothing, only the import price of chemical fiber clothing has risen relatively slowly. The import price of clothing made of other materials has increased by more than 20%, and silk and woolen clothing have increased by more than 50%. Import prices of yarns and fabrics have also increased to varying degrees.
The monthly import price of cotton hit a new high
From January to June, cotton imports grew rapidly as a whole, with a total of 1.547 million tons imported from the world, a year-on-year increase of 72.1% . Imports from the United States, Brazil, India and Burkina Faso all achieved rapid growth, while imports from Australia fell by 67.2%. The average import price in the first half of the year was US$1,820/ton, an increase of 4%.
In June, cotton import volume was the same as last month, with 172,000 tons imported that month, a year-on-year increase of 90.6%. The price of imported cotton has increased month by month since November 2020, further accelerating in the second quarter of this year, rising to US$2,040/ton in June, once again hitting a new high since January 2020.
According to information released by the China Cotton Association, in June, the country continued to introduce measures to strictly control the rise in commodity prices. Textile companies overall maintained high operating rates, and domestic cotton prices were stable and rising. The average price of China’s cotton price index (CCIndex3128B) in June was 15,985 yuan/ton, an increase of 35 yuan month-on-month and a year-on-year increase of 4,027 yuan/ton. Affected by the rise in bulk commodities, international cotton prices have increased more than domestic ones, and the price difference between domestic and foreign cotton prices has narrowed compared with the previous month. </p
