The impact of the international financial crisis on May 19th, China's exports of goods and textile and apparel exports in 2008 have experienced large fluctuations. According to data released by the customs, China’s total trade exports experienced a sharp decline in February, and the overall trend from March to September. In the fourth quarter, total exports began to decline. In terms of the export volume of textiles and garments, the fluctuations throughout the year are also very obvious. The export of textiles and garments also experienced a huge reduction in February, and although it has been rising for the next five months, the change in growth rate is also very unstable. After July, textile exports have been declining, and the decline has been increasing, until December. Leather Shacket,Faux-Leather Jacket,Ladies Fashion Leather Jacket,Leather Puffer Jacket Taizhou Osley Garments Co.,Ltd , https://www.osleyapparel.com
From a longer time horizon, the average monthly growth rate of China's textile exports before 2008 is mainly around 20% and above. After 2008, textile exports mainly showed a downward trend. On the import side, textile imports showed a negative growth (-1.28%) to $12.426 billion. Imports of clothing increased significantly, up 22.07% year-on-year, and the amount reached US$1.767 billion.
It can be seen that China's textile industry is currently facing more serious problems. The growth rate of export volume has gradually decreased, reaching the lowest level since January 2003. China's textile and apparel exports have also experienced large fluctuations since 2008, and mainly showed a downward trend in the second half of the year. The reason is that in addition to the pressures of RMB appreciation and rising production costs in the first half of the year, one of the important factors affecting export volatility in the second half of the year is the current unstable international economic situation.
As one of the important importers of Chinese textiles, the United States' economic fluctuations will inevitably affect the textile trade with China. The current fluctuations in textile sales are directly related to the growing US subprime mortgage crisis and the international financial crisis and economic turmoil it brings. The specific impact of the financial crisis on China's textile industry is as follows:
The decline in US consumption has led to a decline in demand. At present, the US financial market is undergoing a sharp downward adjustment driven by the subprime mortgage crisis. The entire economic adjustment is shifting from the impact on the financial market to the impact on the US real economy. This is mainly reflected in the weak US economic growth and the increasing unemployment rate, and the US real estate prices, which are still in a downturn stage, which may eventually directly affect the normal loans that the US banking industry originally considered to be less risky. According to the latest data released by the US Department of Labor, the unemployment rate in the United States in December 2008 increased from 6.8% in November to 7.2%, the highest level since January 1993. The average unemployment rate for the whole year of 2008 increased from 4.6% in 2007 to 5.8%, the highest since 2003, and the number of unemployed reached 1.1 million. And the preliminary report released by the US Department of Commerce recently showed that the US economy shrank 0.3% in the third quarter, the worst quarter since the third quarter of 2001. At the same time, in September 2008, the largest proportion of consumer spending in the US economy fell for the first time in 17 years, indicating that the US economy may fall into the worst recession in the past 30 years.
As the instability of the US economy increases, unemployment increases, the economy slows down, and consumer confidence will decline. As a result, consumption of goods may be cut, and consumption of imported goods, including textiles, will be reduced accordingly. As China's largest exporter of textiles to the United States, the textile industry is bound to be negatively affected.
The impact of the spread of the US financial crisis. The impact of the spread of the US financial crisis on China's textile industry is mainly reflected in two aspects: on the one hand, the United States itself accounts for a decline in the proportion of the global market. In the fall of 2008, the US market share fell by 0.3 percentage points from the same period in 2006. On the other hand, the spread of the US financial crisis has brought about a shrinking global market demand. Compared with the growth rate of China's textile exports to major sectors in the past three years, except for Oceania, the growth rate of exports to Asia, Europe, Africa and North America has shown a downward trend.
The US subprime mortgage crisis will lead to an increase in the default rate of financial markets. This breach of contract is not limited to the subprime mortgage market. Even the normal loans, such as credit card loans and auto loans, may also have problems. Because heavily indebted American consumers will suffer multiple shocks from falling house prices, falling share prices, shrinking real incomes, rising inflation, and high oil prices.
Due to the shortage of liquidity in US companies, many bad debts have appeared in Chinese textile exporters. For example, in February 2008, a large American luggage company went bankrupt, and it had more than $5 million in accounts receivable from five companies in Zhejiang. A month later, a portable generator manufacturer that occupies nearly half of the US market share filed a bankruptcy application, which in turn led to the inability of Chinese companies to export $10.55 million in receivables.
In summary, the international financial crisis has had a negative impact on the Chinese textile industry. It directly led to a decrease in the demand for Chinese textiles in the United States, the European Union, Japan and other countries, and the fluctuations have become larger. At the same time, it may cause a shortage of funds for US import enterprises, which will increase the bad debts of Chinese textile export enterprises. In addition, the United States may introduce relevant trade protection and anti-dumping policies to reduce the export of Chinese textiles to the United States.
Dangerous "machine"
Although the financial crisis has brought a large negative impact on China's textile export industry, there are also some positive policies and situations.
The increase in export tax rebate rate. The Ministry of Finance and the State Administration of Taxation jointly issued the "Notice on Improving the Tax Rebate Rate for Textiles and Clothing Exports" on February 5, 2009. With the approval of the State Council, the export tax rebate rate for textiles and garments will be raised from February 1, 2009. 15%. The adjustment will involve 3,325 tax numbers, which is the third time in the past six months that the domestic export tax rebate has been raised. On July 31, 2008, the export tax rebate rate for some textiles and garments increased from 11% to 13%, and on October 21, it increased to 14%. According to industry experts, the export tax rebate for textiles and garments is very large, and the industry will benefit about 170 billion yuan. More importantly, this is a signal from the government to support the textile and garment industry. The industry will shift from low added value to high added value, no longer limited to the advantages of manufacturing this link.
At the same time, on February 4, 2009, the State Council executive meeting reviewed and approved in principle the textile industry adjustment and revitalization plan. The meeting held that the textile industry is a traditional pillar industry of China's economy and an important civilian production industry. It is also an industry with obvious international competitive advantages. It plays an important role in prospering the market, expanding exports, absorbing employment, increasing farmers' income, and promoting urbanization. The meeting also reflected the state's support for the textile industry.
The RMB exchange rate is relatively stable. Due to the huge turmoil in the US financial market, the economy is also facing the risk of recession. In order to maintain people's confidence in the US economy, the US dollar has been maintaining a relatively strong state recently. Since July 2005, the US dollar has finally stabilized in a stable state in the near future after a period of sustained depreciation.
Although the renminbi has continued to appreciate in recent years, it has already brought tremendous pressure on textile exporting enterprises. However, it has finally stabilized in a relatively small period in the near future, and it has not threatened the Chinese textile industry from the exchange rate. At present, the stability of this exchange rate is objectively related to the strong dollar protection brought by the subprime mortgage crisis. Objectively, it also provides a stable environment for China's textile industry export in the exchange rate situation.
The integration of the textile export industry has increased. Although the financial crisis has brought great challenges to Chinese textile exporting enterprises, many small enterprises with poor anti-risk ability have closed down. However, on the other hand, this more competitive situation has remained. Textile companies have created opportunities. The fierce competition situation has promoted the optimal allocation of resources and objectively helped the surviving enterprises to improve their competitiveness. In this environment, the company itself will also carry out technological upgrading and management innovation, which will help the company to transform and improve efficiency. These are conducive to the internal integration of the textile industry and the optimization and upgrading of the industrial structure.
Compared with the impact of the Asian financial crisis The Asian financial crisis that erupted in the late 1990s was also a large-scale economic turmoil, which caused a major blow to the economies of Southeast Asian countries and South Korea and Japan. And this financial crisis has also caused many negative effects on China's economy. Among them, the impact on China's industrial development mainly includes: the depreciation of the local currency of the crisis country leads to the international competitiveness of China's industry is mainly weakened by price competitiveness, such as textiles, clothing, shoes and hats; some industries in China that use crisis countries and regions as export markets Demand is shrinking and getting into trouble; the economic recession in crisis countries has a greater impact on the international market, which in turn affects the development of some industries in China; industries with relatively concentrated investment in China in crisis countries are slow to develop due to insufficient withdrawal or insufficient investment. For the textile industry, the main negative effects are:
After the Asian financial crisis, textile companies in many countries affected by the country faced strong financing and debt repayment pressure. Therefore, they used price reduction or dumping methods to recover funds as soon as possible. This caused the international market price of cotton yarn to fall by 10%-15%. This is reflected in chemical fiber products and gauze in Southeast Asia and in two yarns and two fabrics in South Asia. According to reports, South Korea dumped polyester chips and fibers at a price lower than normal by 20%-40%. Indonesia also dumped two yarns at a price lower than normal by more than 20%. The sharp drop in the price of the international market has made the competition in China's textile industry even more intensified.
Due to the impact of the Asian financial crisis, the growth rate of China's textile exports has slowed down. With the spread and expansion of the crisis, the growth rate of China's foreign trade exports in the first seven months of 1998 fell by month, and the rate of decline gradually slowed down. According to customs statistics, from January to June 1998, China’s exports of textiles, clothing and accessories were US$21.356 billion, up 7.82% year-on-year, of which textile exports were US$6.472 billion, down 3.34% year-on-year; apparel and clothing accessories exports were US$14.84 billion, up year-on-year. 13.52%. Looking at the situation in a single month, the export situation in January-April 1998 showed an upward trend. May was a turning point, with an unprecedented sharp decline in exports, with a drop of 5.74%. It has picked up again in June.
Directly, the two financial crises have led to a slowdown in the growth of textile exports, but they have not been declining, and they are all fluctuating. Intensifying competition in Chinese textiles, declining competitiveness, and reducing profit margins have challenged the Chinese textile industry. Indirectly, the two financial crises have led to a more turbulent international economic situation, expanding from the financial market to the real economy. It also brought instability in the exchange rate market and caused the relative value of the renminbi to change.
The impact of the two financial crises on China's textile industry is not the same. First, the factors that influence textile exports are different. The Asian financial crisis has made countries such as Southeast Asia step up their inclinations toward textile export policies, reducing prices and dumping methods to reduce international textile prices and occupying the international market for Chinese textiles. The US subprime mortgage crisis has reduced consumption in the United States, the European Union and other places, and the demand for Chinese textiles has decreased. In other words, the Asian financial crisis has reduced the competitiveness of Chinese textiles from the supply side, while the US subprime mortgage crisis has affected China's textile exports from the demand side.
Second, the international situation facing the Chinese textile industry is different. The Asian financial crisis has brought about a relative appreciation of the renminbi, which has reduced the price advantage of textiles. The US subprime mortgage crisis objectively kept the renminbi in a relatively stable currency, temporarily preventing the trend of RMB appreciation.
Third, the impact of the two financial crises is different. In terms of scope, the Asian financial crisis mainly affects the Asian region. The impact of Chinese textiles on other regions is not great. The US subprime mortgage crisis affects the global economy, which not only affects the demand in the US market, but also makes the EU, The demand for textiles in countries and regions such as Japan and South Korea has declined. In terms of the degree, in fact, the impact of the Asian financial crisis on Chinese textile exports is not particularly large, because the export structure of each country and the market segments occupied by them are not the same, and the share of textiles in other countries in the world market in Asia. It is not particularly large, and the scale of China's textile exports is still incomparable to other countries. As the largest trade target of China, the US's shrinking consumer demand will have a deeper impact on Chinese textiles. From the perspective of the impact time, the impact of the Asian financial crisis on the textile industry has been basically digested by China within a year or two. What is the consequences of the US financial tsunami and how long it will affect it is still unpredictable.
Breakthrough recommendations The international financial crisis has had varying degrees of impact on the Chinese textile industry. Whether it is the Asian financial crisis 10 years ago or the gradual deepening of the US subprime mortgage crisis, textile export growth has slowed down and even fluctuated. What China needs to do is not only to provide certain support and subsidies to the textile industry in terms of policies, but also to improve and adjust itself within the textile industry. Specifically, China's textile industry can be improved in several ways.
Increase the added value of the product itself, not just the price advantage. It can be found that if the international market is opened only by low prices, it is very easy to be affected by the international economic situation, and the trend of RMB appreciation is very inevitable. If you want to take advantage of the international textile market for a long time, you must consider this aspect. factor. Moreover, the low-price strategy is more susceptible to the prosecution of anti-dumping by exporting countries, which will affect the image of China's trade and is not conducive to the export of the entire textile industry.
Strive to reduce production costs and increase the economic benefits of exports. At present, the rise in production costs has become an inevitable trend, which will greatly reduce the profit margin, and will force products to raise prices and weaken their competitiveness. Therefore, costs should be reduced as much as possible from various aspects, such as optimizing the structure of raw materials, updating equipment, improving production efficiency, and accelerating technological innovation.
Change market positioning and strengthen the development of the domestic market. The international market is always affected by various factors in various countries and is therefore very unstable. Although the degree of China's opening up to the outside world has gradually deepened, the degree of dependence of economic growth on international trade has gradually increased, but the domestic market is still relatively stable. Moreover, the Chinese market is quite impressive and has a very large market potential. If the domestic demand can be expanded, the prospects of the Chinese textile industry are still broad.
Open up new markets. As far as the Chinese textiles are in the markets of Europe and the United States, on the one hand, these countries have a high degree of financial globalization. Once the economic fluctuations have a great impact on the economy, on the other hand, the textile market in these countries has a certain degree of saturation. The space is not too big. Chinese textiles can actively explore the markets of other countries such as Africa and South America. Once they can stand on these markets, they can spread risks and increase profits.
The survival choice of the textile industry under the international financial crisis