The outbreak of the new coronavirus pneumonia epidemic has profoundly affected the development of the world economy in 2020. In the context of my country taking the lead in containing the spread of the epidemic and quickly and fully resuming work, production and markets, through the joint efforts of the upstream and downstream of the industrial chain, Chinese textile and apparel export companies withstood the impact of the unfavorable world international trade environment. Throughout the year Exports achieved rapid growth and became an important driving force for the growth of national trade in goods.
China’s textile and clothing foreign trade companies have experienced the tempering of 2020, and their resistance to pressure has significantly increased, building strong confidence in achieving their 2021 export goals.
Looking forward to 2021, what challenges will my country’s textile and clothing foreign trade companies face in export, and what issues need attention?
The expected appreciation of the RMB deserves attention
Since China took the lead in controlling the epidemic , the economy recovered rapidly and the RMB appreciated all the way. From June to December 2020, the RMB began to appreciate. In these seven months, the RMB exchange rate against the US dollar rose by more than 6,000 points. Looking forward to 2021, analysts believe that international capital favors RMB assets, and market forces should be in a state of promoting strong appreciation of the RMB. The appreciation of the RMB is likely to continue in the first half of the year.
The depreciation of the US dollar and the appreciation of the RMB are affecting the nerves of exporting foreign trade textile and clothing enterprises. “Export companies sign all US dollar orders. If the RMB continues to appreciate, some orders will have no profit or even lose money.” A person in charge of a medium-sized textile and clothing export company from Jiangsu said, coupled with the rise in raw materials and shipping freight pressure, business operating pressure has increased sharply.
A business staff member of a small foreign trade company in Zhejiang that is engaged in the export of masks and other textiles said that the recent appreciation of the RMB has caused the company’s profits to decrease by 7% to 8%, and some of its products are at a loss. . Prices for previously accepted orders can no longer be raised, and the losses caused by exchange rate fluctuations can only be borne by oneself.
The person in charge of a medium-sized company in Fujian that specializes in children’s clothing exports said that in order to avoid exchange rate risks, the price of the company’s export products has increased by about 5%, and some customers cannot accept the price increase. , which also caused the company to lose some orders. “Some of our products have very low profits, customers are unwilling to bear the risk of exchange rate fluctuations, and it is impossible for companies to sell at a loss,” she said.
It is worth noting that some large foreign trade companies have used financial instruments such as foreign exchange locks and hedging to avoid risks, while small and medium-sized foreign trade companies lack the financial resources and professional skills to cope with frequent exchange rate fluctuations. fluctuation. How to deal with exchange rate fluctuations has become a hurdle faced by small and medium-sized export textile and clothing foreign trade companies in 2021. If the RMB continues to appreciate, it may also affect the good export situation since the second half of 2020.
In order to avoid the risk of exchange rate fluctuations, some professionals suggest that you can also choose RMB-denominated settlement or an appropriate foreign currency-denominated settlement, instead of relying too much on US dollar settlement. At present, some textile and clothing foreign trade companies have begun to try to use RMB settlement to avoid risks caused by fluctuations in the US dollar exchange rate. For buyers from Southeast Asian countries, Chinese export textile companies have actually started using RMB for settlement very early. In addition, many foreign trade textile companies in Africa use RMB for settlement. In recent years, the acceptance and scope of RMB have become wider and wider, which deserves the attention of export textile enterprises.
Export potential in the post-epidemic era needs to be tapped
2020 is special In the past year, my country’s textile and apparel exports have experienced significant fluctuations due to the impact of the epidemic. In 2020, the sudden COVID-19 epidemic caught the world by surprise. While many countries in the world were still under severe impact from the epidemic and the market economy was recovering slowly, our country gave full play to its institutional advantages and contained the spread of the epidemic in a timely manner. Export textile companies were not afraid Faced with difficulties, we organized production as soon as possible and vigorously delivered epidemic prevention materials to all parts of the world. Driven by the global demand for anti-epidemic materials, the export of textiles, including masks, in the first half of last year did play a major role in promoting my country’s overall foreign trade exports of textiles and apparel. Subsequently, due to the second wave of the epidemic, overseas production faced stagnation. The huge “magnetic attraction” formed by the stable industrial chain and supply chain system of my country’s textile and garment industry caused some international orders to begin to return, and it quickly assumed the responsibility of producing orders for the world. Starting from the third quarter of last year, many garment foreign trade factory orders began to recover or become saturated, and even experienced a burst of orders.
So, can this export momentum continue to be maintained and extended in 2021?
It is foreseeable that, first, the direction of procurement in the international market will return to normal as the epidemic situation improves. As China demonstrated strong and stable supply capabilities during the epidemic, the world’s major export markets temporarily stopped purchasing from overseas and returned their focus to China. China’s international market share of textiles and apparel has rebounded. However, as the epidemic gradually eases, markets such as the European Union, the United States, and Japan are once again turning their attention to ASEAN, South Asia, and countries and regions with geographical advantages, and the market share of Chinese products is likely to decline. Export textile companies need to focus on changes in procurement trends, make arrangements in advance, and be prepared to respond.
Second, epidemic prevention materials are still an important force in driving export growth. The world has not yet emerged from the shadow of the epidemic, and the situation remains uncertain. Although my country’s exports of epidemic prevention materials have reached a relatively high level,�It has declined somewhat, but it will still maintain the characteristics of large scale and high growth, and it will still be the main force driving export growth. According to WTO data, in many major markets, Chinese masks account for more than 2/3 of the country’s total imported masks. Among them, in the United States and Italy, Chinese masks account for nearly 3/4 of the total imported masks in these two countries. , accounting for 80% in Japan.
Third, the textile and clothing cross-border e-commerce platform will be further developed in the post-epidemic era. Affected by the epidemic, online purchasing and trading became the main way for export and foreign trade textile companies to develop orders in 2020, and online exhibitions received more attention. Some experts predict that foreign trade orders will become more fragmented, small orders will become mainstream, and the living space of pure trade foreign trade companies will become increasingly narrow. China’s foreign trade textile companies, especially B2B foreign trade companies, should adjust their product lines and reposition their customer base.
“From outside to inside” to seek benefits from high quality
At present, accelerating the formation of a new pattern of high-quality development with the domestic cycle as the main body and the domestic and international dual cycles reinforcing each other has become the theme of my country’s economic and social development. Not long ago, nearly 70 foreign trade companies in Hunan participated in the “export products for domestic sales” exhibition and sales docking activity. This event aims to give full play to the guiding role of the government and the main role of enterprises, and use the pilot market platform of new foreign trade formats to help foreign trade companies cope with operational risks during the epidemic period, build a domestic sales platform, accurately connect domestic consumer demand, and support marketable export products to develop domestically. market.
In fact, as early as the trade friction between China and the United States, some textile and garment foreign trade companies have consciously shifted their focus from foreign trade to domestic trade. The person in charge of a fabric manufacturing company in Zhejiang said that in previous years, their order composition was 80% foreign trade and 20% domestic trade. However, last year, on the one hand, it was affected by the epidemic, and on the other hand, it consciously opened up new customers, so it gradually shifted its focus to domestic trade. In terms of trade, domestic trade currently accounts for more than 70% of total trade volume.
It should be noted that today’s world economic environment is still deeply affected by the epidemic, and the textile and apparel industry is facing the dilemma of slow recovery in the end consumer market, especially due to the poor overseas economy. The nation’s unemployment rate and the number of bankruptcies are still climbing. Once the epidemic reoccurs, it will be easy for foreign trade activities to press the “pause” button again. Therefore, my country’s textile and garment export enterprises should not put their eggs in one basket. While developing overseas orders, they should also focus on developing the mainland market, actively seek benefits from high quality, and share operational risks. Shifting to high-quality development is the solution to realizing the new development pattern of “dual circulation”.
A large textile and apparel foreign trade export company from Jiangsu has done a relatively good job in this regard. In terms of external circulation, this company has relied on the advantages of a complete industrial chain to face difficulties, accelerate transformation and upgrading, and continue to enhance its competitiveness in the reconstruction of the global industrial chain. Among them, the supply chain platform economic model has become a new highlight in the growth of foreign trade. It takes the supply chain platform economic model as the core of transformation and upgrading, extends to both ends of the industrial chain, and the efficiency of the supply chain continues to increase. It actively coordinates and utilizes its own advantages and the comparative advantages and market space of other countries and regions to promote the extension and upgrading of the supply chain and shape A new pattern of international division of labor with high starting point intervention and extension of high-end links.
In terms of internal circulation, this company gives full play to its domestic scale market advantages, conducts in-depth research and judgment on market trends, uses leading technology and mid-to-high-end functional products to expand and strengthen the domestic market, and develop New growth point. </p
