In ancient times, when natural disasters occurred in the north, the survival of nomadic peoples was threatened, and there was a high probability of war with the Central Plains. In modern times, because the Qing government was closed-door and weak, wars became foreign capital. A conventional means to obtain China’s interests, such as the Opium War and the Sino-Japanese War of 1894-1899, etc.; after the Second World War, with the emergence of nuclear bombs, the cost of a hot war between major powers was too high, so trade wars became Nowadays, great power competition is the norm.
This trade war is a continuation of the trade friction between China and the United States in recent years. The United States believes that the rise of China threatens the United States’ dominance in the world, and will attack any country or region that can threaten the United States’ dominance. This was true for the Soviet Union in the 1980s, Japan and Germany in the early 1990s, and China today.
If a Sino-US trade war breaks out, what impact will it have on China’s textile exports?
The author believes that even if the trade war really breaks out, the impact on the domestic textile industry will be limited. Why? Let’s first look at a simple SWOT analysis of China’s textile industry.
Advantages: 1. China’s textile industry is large in scale, has huge productivity, and is low in substitutability
2. There is a complete industrial chain that can produce everything from low-end products to high-end products
Disadvantages: 1. The brand effect is poor and the added value of product exports is relatively low
2. There is still a certain gap between the technical level of high-end products and developed countries
Opportunities: 1. Supply-side reform, textile machinery and equipment technology is ushering in an upgrading
br> 2. Domestic demand continues to increase, and the domestic market provides opportunities for the textile industry to develop again
Challenges: 1. Domestic labor, resources, and environmental protection costs increase
2. The textile industry in Southeast Asia develops rapidly
To sum up, it is easy It is concluded that China’s textile industry is now in a period of prosperity. From a competition perspective, China’s low-end products are subject to competition from Southeast Asian countries, but at the same time, high-end products are catching up with developed countries in Europe and the United States.
But what is written in the US tariff catalog? It is textile machinery with the purpose of preventing the overall progress of the textile industry. There is still a gap between China’s textile machinery and developed countries in Europe, America and Japan. The main emphasis is on cost-effectiveness. Therefore, the main consumers are in the country and Southeast Asian countries. After the tariff increases, the most it will lose is the US domestic market, which will not hurt the bones.
What is the most taxing thing? It is to restrict the import of clothing and textile products.
In 2017, my country’s textile and apparel exports to the United States were US$45.39 billion, a year-on-year increase of 1%, accounting for approximately 17% of China’s total textile and apparel exports. Among them, textile exports were US$12.39 billion, a year-on-year increase of 6%, and clothing exports were US$33 billion, a year-on-year decrease of 0.8%.
But because Chinese textiles are of high quality and low price, products from Southeast Asia are too low-end, and products from developed countries are too expensive, the status of Chinese textiles is temporarily irreplaceable. Once tariffs are increased on a large scale, it will visibly increase the cost of living of American civilians, and the impact on China’s textile industry will be limited. Doing this is equivalent to 800 damage to the enemy and 1,000 damage to yourself, which is completely outweighed by the gain.
During the visit, the author learned that textile people with export business basically adopt a wait-and-see attitude towards orders from the United States and are cautious about accepting orders. On the one hand, this is due to the booming domestic trade, and on the other hand, it is also affected by the trade war.
The author believes that the trade war will not increase the risk of textile exports to the United States, and cloth bosses can accept orders normally.
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