In the face of complex domestic and international situations and a high base in the previous year, my country’s clothing exports will still achieve a certain growth in 2022, but the growth rate has dropped significantly. According to China Customs statistics, from January to December, my country’s total exports of clothing (including clothing accessories, the same below) totaled US$175.4 billion, a year-on-year increase of 3.2%, and the growth rate continued to slow down by 1.4 percentage points compared with the previous 11 months. In November and December, clothing exports were US$13.12 billion and US$14.29 billion respectively, down 14.5% and 10.1% respectively year-on-year. Compared with the 16.8% decline in October, the downward trend slowed down slightly.
Judging from the quarterly trend, my country’s clothing exports in the four quarters of 2022 were 7.4%, 16.1%, 6.3% and -13.9% year-on-year respectively. The decline was obvious in the fourth quarter. However, due to the higher growth rate in the early period, the clothing exports for the whole year still achieved 3.2%. % growth, the achievements are hard-won. In the three years since the epidemic, my country has reversed the year-on-year decline in apparel exports that peaked in 2014, and the export scale has increased by about 20% compared with 2019 before the epidemic, which fully reflects the impact on the global supply chain and the imbalance of market supply and demand since the outbreak. Under such circumstances, China’s garment industry has the characteristics of great resilience, full potential and strong competitiveness. Looking forward to the future, my country’s garment export industry will face more severe challenges under the multiple pressures of weak international demand, overseas low-cost competition, intensified trade frictions, and the “de-Chinaization” of the supply chain.
my country’s apparel exports in the first 11 months
Prices drive export growth, and knitting performance is weaker than woven fabrics
From January to November 2022, knitted garment exports were US$72.29 billion, a year-on-year increase of 6.3%, the export quantity was 19.83 billion pieces, a slight decrease of 0.7% year-on-year, and the export price increased by 7.4% year-on-year. The export of woven garments was US$67.97 billion, a year-on-year increase of 11%, the export quantity was 11.75 billion pieces, a year-on-year decrease of 2.7%, and the export price increased significantly by 14%. Exports of clothing accessories reached US$15.26 billion, a year-on-year increase of 13.8%.
In November, exports of all major categories of clothing declined. The export of knitted clothing dropped sharply by 18.1%, the export of woven clothing dropped by 10.5%, and the export of clothing accessories dropped by 4.5%. Affected by the “Xinjiang-related Act”, exports of cotton knitted and woven garments fell by 28.8% and 23.1% respectively in November, of which exports of cotton knitted and woven garments to the United States dropped by 35.1% and 30.1% respectively.
Exports of commuting, sports and outdoor clothing grew rapidly
Exports of commuting, sports, outdoor and cold-proof clothing maintained rapid growth. From January to November, exports of shirts, coats/winter suits, scarves/ties/handkerchiefs increased by 29.9%, 22% and 22.1% respectively. Exports of sportswear, dresses, T-shirts, sweaters, socks and gloves increased by more than or close to 10%. The export growth rate of suits/casual suits, pants and bras was less than 5%. Exports of underwear/pyjamas and baby clothing declined slightly.
In the month of November, except for shirts, sportswear and scarves/ties/handkerchiefs, which increased by 5.1%, 1.9% and 18.4% respectively, exports of other categories fell. Exports of suits/casual suits, underwear/pajamas dropped by more than 20%, and exports of coats/winter suits, dresses, sweaters, pants, bras, and baby clothes dropped by more than 10%.
Exports to the United States declined, while exports to ASEAN, Latin America, and Central Asia grew better.
From January to November, China’s exports to the United States were US$35.7 billion, down 1.1% year-on-year. Clothing exports to the EU, ASEAN, and Japan were US$31.12 billion, US$14.98 billion, and US$13.61 billion respectively, up 6.7%, 25.1%, and 0.2% year-on-year respectively. %. With the positive effects of the effective implementation of RCEP, the ASEAN market has shown great development potential.
From the perspective of major export regional markets, from January to November, exports to Latin America increased significantly by 20.3%, exports to Africa decreased by 11%, exports to countries along the “Belt and Road” increased by 14%, and exports to RCEP member states increased by 10.9%. From the perspective of major single country markets, exports to Kyrgyzstan increased by 79.2%, exports to South Korea and Australia increased by 3.7% and 16.2% respectively; exports to the United Kingdom, Russia and Canada decreased by 9.9%, 18.5% and 15.9% respectively.
In November, exports to major markets all declined. Exports to the United States fell by 19.4%, falling for four consecutive months, but slower than the 35.6% decline last month. Exports to the EU fell by 18.7%, falling for three consecutive months, which was slower than the 33% decline last month. Exports to ASEAN fell by 5.4% for the first time. Exports to Japan also turned from rising to falling, down 16.8%.
Exports from Zhejiang and Xinjiang bucked the trend, while exports from Guangdong and Fujian declined.
From January to November, Zhejiang Province’s garment exports reached US$32.51 billion, a year-on-year increase of 15.6%, exceeding the national average export growth rate by 11 percentage points, accounting for 20.2% of the national garment export share. Guangdong ranked second, with exports falling by 7.6%. Jiangsu, Shandong, and Fujian ranked third to fifth respectively, with year-on-year rates of 1.1%, 7%, and -9.3% respectively. Xinjiang’s exports increased by 74.9%, surpassing Shanghai to rank sixth. Exports from central and western regions such as Jiangxi, Hunan, and Sichuan grew rapidly, with year-on-year increases of 25.2%, 41.8%, and 22.9% respectively.
In the month of November, the top five export regions all experienced declines. Exports from Zhejiang, Guangdong, Jiangsu, Shandong and Fujian decreased by 0.9%, 15.5%, 25.2%, 13.6% and 27.5% respectively. Some central and western provinces and cities still maintained rapid growth, with exports from Xinjiang and Guangxi increasing by 18.7% and 56.5% year-on-year.
The market share in North America has declined significantly, while the market share in the EU and Japan has been basically stable.
From January to October, China accounted forThe driving effect of oral quota will further weaken
In December 2022, China’s export container freight average index was 1358.63, down 61.3% from the highest point in January, which greatly alleviated freight cost pressure. It is expected that freight rates will further return to pre-epidemic levels in 2023. At the end of 2022, cotton prices fell by 35.5% year-on-year, cotton yarn prices dropped by 19.6%, and polyester filament and staple fiber prices fluctuated within ±3% year-on-year. With the improvement of China’s economic fundamentals and the start of domestic consumption, raw material prices will stop falling and rebound in 2023. In 2022, the RMB exchange rate against the US dollar has depreciated by 8.32%, the largest annual decline since 1994. In the new year, the RMB exchange rate is expected to enter the appreciation channel, which will have a negative impact on export competitiveness and profits.
The trend of “de-Chinaization” is the main uncertain factor in the future
The trend of “friendly shore outsourcing” and “decoupling and disconnection” in the United States and Western countries is becoming more and more intense. The “Xinjiang-related Act” implemented in June 2022 has severely affected the willingness of American buyers to import from China. Not only has the procurement strategy of cotton products been significantly adjusted, but the export of other products to the United States has also been affected to a certain extent. According to a report released by the American Fashion Industry Association in July 2022, 80% of American companies plan to continue to reduce purchases from China in the next two years, and this proportion will be 63% in 2021. 86% of US companies plan to reduce the purchase of cotton clothing from China, and 45% of US companies plan to reduce the purchase of non-cotton clothing from China. Echoing the US restrictive measures, on June 9, 2022, the European Parliament passed the “Resolution on Customs Measures against Forced Labor” with a high vote. On September 14, the European Commission published the draft Regulation on the Prohibition of Forced Labor Products on the EU Market. On January 1, 2023, Germany officially implemented the Supply Chain Enterprise Due Diligence Act. Recently, the U.S. Customs and Border Protection has invoked the “Countering U.S. Adversaries Through Sanctions Act” and will seize the goods of three Chinese companies at the port of entry starting from March 14, 2023 on the grounds that “North Korean labor is involved.”
The trend of industrial transfer is obvious, and transformation and upgrading need to be accelerated.
At present, overseas supply chains are unable to pose a fundamental challenge to China in the short term, no matter in terms of production capacity scale, product structure or industrial chain integrity. Its products are highly concentrated in end-consumer products such as clothing and home textiles, and it still needs a process to reach or surpass China in terms of scale or structure. Neighboring countries are highly dependent on Chinese textile raw materials, especially chemical fiber products. More than 60% of textile raw materials in Vietnam, Bangladesh and other countries are imported from China. We should fully seize the opportunity when neighboring countries are still highly dependent on China, take advantage of the RCEP opportunities, rationally deploy industries and trade, accelerate transformation and upgrading, and try to avoid the negative impacts of too rapid industrial transfer.
my country’s garment export industry still has strong endogenous competitiveness
First, China has a complete textile and apparel industry chain and an efficient supply chain. Second, China has comprehensive advantages in software and hardware, which offsets its labor cost disadvantages to a certain extent. Third, there is sufficient momentum for the development of new foreign trade formats. New business formats such as cross-border e-commerce have higher requirements for rapid response and flexible production. In recent years, they have relied on China’s flexible, efficient and highly digital manufacturing base to develop rapidly. The production capacity of Southeast Asian countries is concentrated on large-volume, basic products, and it is currently difficult to afford the “small and fast” trade model. Fourth, the implementation of RCEP will help China and ASEAN, the two largest textile and apparel production centers in the world, to further integrate, realize the big cycle within the RCEP region, and complete the development and development from “RCEP manufacturing” to “RCEP consumption” to “RCEP brand”. leap. Fifth, China’s large single market size provides a steady stream of development momentum for industry production capacity and development space.
In 2023, the external environment will become more complex and severe, uncertain and unstable factors will increase, insufficient external demand will become a prominent challenge, and the impact of the historically high base will continue to appear. The operation of garment foreign trade will be further under pressure. In the first half of the year, especially the first quarter, there will be greater downward pressure on exports. It is expected that It will continue or even intensify the negative growth trend in the fourth quarter of 2022 (clothing exports in 2022Q4 fell 13.9% year-on-year). At the same time, it should also be noted that after decades of development, my country has obvious competitive advantages in the global textile and apparel supply chain, and is in a core position in the Asian supply chain. In particular, the Chinese economy will achieve an overall improvement in 2023, which will provide Provide strong support for stabilizing foreign trade. In the future, on the one hand, we must strive to promote a steady increase in the international market share of high value-added products, and on the other hand, we must avoid a rapid decline in the international market share of mid- to low-end products. On the basis of maintaining a basically stable export scale, we will accelerate the transformation and upgrading of the industry, tap innovative growth points in trade, enhance comprehensive competitiveness, and achieve high-quality development of apparel foreign trade exports.
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