Minister of Commerce: The Chinese government has officially approved the RCEP agreement
On the afternoon of March 8, the fourth session of the 13th National People’s Congress held its second plenary session at the Great Hall of the People. After the meeting, a “Ministerial Channel” interview event was held, and Minister of Commerce Wang Wentao was interviewed via online video.
When answering questions about the progress of the Regional Comprehensive Economic Partnership (RCEP) entering into force and how to help companies seize opportunities, Minister of Commerce Wang Wentao said, The signing of RCEP means that a region accounting for one-third of the world’s economic aggregate can form a unified market. The Party Central Committee and the State Council attach great importance to this, and have specially established a working mechanism for the effective implementation of RCEP. The current progress is that the Chinese government has officially approved the agreement, and some member states are also accelerating the approval. It is hoped that the relevant countries can accelerate the progress and eventually reach the entry into force threshold of the agreement approved by 6 ASEAN member states and 3 non-ASEAN member states.
According to regulations, the RCEP agreement needs to be approved by at least 9 of the 15 members before it can take effect, including at least 6 ASEAN member states and China, Japan, At least 3 countries among South Korea, Australia and New Zealand. Once the RECP agreement comes into effect, it will also have a profound impact on our textile industry.
The epidemic has a great impact on the textile industry Major
reports say that the COVID-19 epidemic has forced many well-known European and American brands to protect themselves by canceling and delaying orders (even some are already in progress) or postponing payments. its capital turnover capacity. A head of a Spanish clothing company who did not want to be named said: “During the lockdown in Europe, our payment time for all suppliers has been extended by 30 days. This has a big impact on them, but this is a matter of It is a matter of our survival. It was not until August last year that we more or less restarted the supply chain.”
The report pointed out that the initial impact has been alleviated, Production and trade activities gradually returned to normal, but subsequent waves of epidemics brought new trade and personnel movement restrictions. According to consulting firm McKinsey, by the end of last year, the global textile and apparel industry had lost 20% to 25% of its sales, with Europe losing 25% to 30% and the United States losing 20% to 25%. Depending on the specific circumstances of each country and region, it is expected that the industry data level of 2019 will not be restored until the end of 2022 or 2023.
The surge in oil prices triggered a rise in textile raw materials Price
Since March, oil prices have soared like a rocket. The current surge in oil has also added fuel to global inflation expectations.
Although many people think that inflation is invisible and intangible, Chinese textile export companies that have entered the traditional “Gold, Three, and Silver” peak seasons have been the first to feel this. changes therein. Because polyester fiber uses ethylene refined from petroleum as raw material, some polyester factories have increased their quotations for polyester filament, driven by a surge in prices of upstream raw materials.
Petroleum as an upstream raw material has experienced a sharp rise in price, but export textiles have been unable to increase prices. Since textile products are seasonal products, samples are usually developed and sent to customers in September of the previous year, prices are set in December, and orders are placed in February of the following year and shipped in June. Therefore, talking about price increases now will cause prices in the entire chain to move, and many customers would rather cancel their orders.
From the perspective of terminal demand, the global terminal market has not improved significantly. On the contrary, under the impact of the epidemic, global clothing inventories have reached a record high. But even under this circumstance, the costs of textile raw materials, fabrics, dyeing fees, etc. are all rising significantly.
RCEP agreement helps the textile industry recover
RCEP covers a population of 2.2 billion, the GDP of member countries reaches 25.6 trillion US dollars, and the intra-regional trade volume is 10.4 trillion US dollars, accounting for 27.4% of the total global trade volume. It is Currently, it is the free trade agreement with the largest population, largest economic aggregate, and largest trade volume in the world. After the agreement takes effect, more than 90% of goods trade in the region will eventually achieve zero tariffs, and the main tax reduction will be to zero immediately and to zero within 10 years, making the RCEP Free Trade Zone expected to fulfill its commitment to liberalizing all goods trade in a relatively short period of time. .
The textile industry, which is highly dependent on foreign trade exports, will benefit a lot. Take the textiles exported from China to Japan as an example. Currently, most textiles and garments face import tariffs of about 8%-11% imposed by Japan. Japan has promised to gradually reduce the import tariffs on textiles and garments under RCEP until 15 years later. zero. Low tariffs or even zero tariffs on China’s textile exports will continue to appear in RCEP agreement countries.
The textile industry in front of us has not yet recovered from the impact of last year’s epidemic, and the inventory of clothing and fabrics that far exceeds previous years has not yet had time to digest , this year’s surge in crude oil has once again dealt a heavy blow to the textile industry. The recovery of the textile industry still has a long way to go, but fortunately, the Chinese government has officially approved the RCEP agreement, bringing the agreement closer to implementation. In the next few years, perhaps low textile tariffs in many countries will make my country’s textile industry prosper again.
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