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Textile and clothing exports hit the highest level in the same period in history

According to Chinese customs statistics, from January to September, China's textile and apparel exports totaled $227.59 billion billion, up 5.6 percent year-on-year and 12.7 percent over the same period in 2019, the highest level in the same period in history. The scale of my textile and clothing exports in masks and other epidemic prevention materials exports fell sharply by 80%, a number of unprecedented cost increases can still hit a new high, the main reason is that China's industrial chain to play a strong advantage.

Apparel exports hit new high since 2016, but growth slowed quarter by quarter

From January to September, apparel exports were $122.42 billion billion, up 25.3 percent year-on-year and 8.5 percent higher than the same period in 2019, a six-year high for the same period. In the first and second quarters of this year, my country's clothing export growth rates were 47.4 and 35.7 respectively. Due to the high base last year, the growth rate in the third quarter slowed down significantly to 9.4, but the export scale remained at a historical high.

The explosive demand in the US market leads to high growth.

Led by the U.S. fiscal and monetary stimulus package, international demand has been compensatory. Especially since March, the U.S. clothing retail sales have hit a record high, breaking the previous record for six consecutive months, superimposed on the second largest clothing supplier in the United States-Vietnam's repeated epidemic, driving China's clothing exports to maintain rapid growth. In particular, from July to August, about half of China's clothing export growth came from exports to the United States.

China's market share in the U.S. and Japan is stable, and its share in the EU is squeezed by Turkey and others.

In the first eight months, China's market share of clothing imports in the United States, the European Union and the United Kingdom fell by 0.7, 2.3 and 3.1 percentage points respectively, while its market share in Japan and South Korea increased by 0.8 and 1.7 percentage points respectively. Among other major suppliers, Turkey performed well, with exports growing by 30.3 per cent in the first eight months, while India's clothing exports grew by 36.5 per cent in the first half of the year despite the outbreak, and Vietnam by 15.8 per cent in the first eight months.

Trend Outlook 1: Affected by last year's high base, it is expected that the growth rate of clothing exports in the fourth quarter of this year will continue to "fever", but still maintain resilience

The recovery of international market demand is obvious, but the negative impact of the threat of high inflation on consumption cannot be ignored. The United States in August, the increase in the price index of consumer spending hit a new high since 1991, the European Union and Japan repeatedly in the "blockade" and "unsealing" swing, consumption has not yet returned to pre-epidemic levels. The governors of the four major central banks of the United States, Europe, Japan, and the United Kingdom warned at the end of September that the deterioration of supply chain bottlenecks will lead to continued high inflation.

Supply chains in other countries are gradually recovering, and the scale and sustainability of order repatriation should be carefully judged. Ho Chi Minh City has gradually resumed work after unsealing, with a resumption rate of nearly 90 per cent in early October and a rework rate of nearly 60 per cent. Some enterprises have received export orders until the second quarter of next year.

Trend Outlook 2: While external demand recovers, the industry will face greater cost and capacity pressure.

Sea freight rates remain high and capacity tensions are still difficult to fully alleviate. The U.S. government's recent requirement that the ports of Long Beach and Los Angeles operate around the clock is expected to speed up the congested supply chain, but bottlenecks are difficult to eliminate in the short term. On October 9, the Shanghai Export Container Freight Index failed to continue the previous correction trend and still rose to 4647. 6 points, six times last year's low.

Cotton and other raw material prices from the supply and demand fundamentals of irrational rise, driving some intermediate products to follow the price increase, far beyond the downstream enterprises and market capacity, profits are seriously squeezed.

Tight energy supply and rising prices have become a common phenomenon, which has inhibited the production capacity of all links in the entire industrial chain. First, it is difficult to complete orders, second, delivery time cannot be guaranteed, and third, it has boosted the cost of various factors.

The RMB exchange rate remained strong and continued to compress export profits. In the first three quarters, the average RMB exchange rate appreciated by about 8% compared with the same period last year.

In the first eight months, the average unit price of woven and knitted garments increased by 9.1 and 7.5 respectively year-on-year, showing the impact of rising costs on export prices. In the future, whether costs can continue to be passed on to prices will be constrained by many factors.