Review Of China'S Clothing Export In The First Half Of The Year And Prospects For The Second Half Of The Year

　　 (source: clothing branch of China Textile Import and Export Chamber of Commerce) In the first half of this year, China's clothing exports showed a rapid growth trend. According to the statistics of China Customs, China's clothing (including accessories, the same below) exports amounted to US $74.11 billion in the first half of the year, up 40.9% year-on-year and 13.1% higher than the same period in 2019. Since the second quarter, the growth of clothing export has slowed down month by month.

Interpretation: China's clothing export situation in the first half of the year

The export growth of knitted garments is much higher than that of woven garments

In the first half of the year, China's export of knitted garments increased by 59%, significantly higher than that of woven garments by 17.7%. The main reason for the small growth of woven clothing export is that the growth rate of chemical fiber woven clothing is only 9.4%, which is far lower than the average growth rate. As medical protective clothing is classified as chemical fiber woven clothing, the export base of protective clothing was relatively large last year, and the export in the first half of this year decreased significantly year-on-year, which led to the slow growth of woven clothing export.

In addition, the export of wool and silk woven garments with higher prices decreased, and the growth rate of fur leather clothing was only 4%. Thus, it can be seen that the purchasing power of foreign consumer market for high price clothing is still weak.

Export growth of epidemic prevention products slowed down gradually

In the first half of the year, the export of medical protective clothing was US $2.1 billion, a sharp decrease of 64.7% year-on-year, an increase of 136% over the same period in 2019. In June, the export value of protective clothing decreased by 90.6%, almost back to the export value before the epidemic. The export of medical gloves still maintained a rapid growth, with a cumulative export value of US $6.28 billion in the first half of the year, a year-on-year increase of 241.8%, and an increase of 590% over the same period in 2019. The growth rate of medical gloves export slowed down month by month, and the growth rate in June was only 18.8%.

With the decline of foreign demand for epidemic prevention products, and the high export price and large base last year, the export growth of epidemic prevention products slowed down in the first half of this year, and the pulling effect on clothing export was weakened. The main anti epidemic products included in clothing export are medical protective clothing and medical gloves. In the first half of the year, the export of medical protective clothing and gloves totaled 8.38 billion US dollars, accounting for 11.3% of the total export of clothing, while in 2020, the export of protective clothing and gloves for traditional Chinese medicine accounted for 18.7%. It is expected that the proportion of protective clothing and gloves in clothing export will be further reduced in the second half of the year.

If the factor of epidemic prevention materials is excluded, China's conventional clothing export in the first half of the year is 65.73 billion US dollars, with a year-on-year increase of 46.7%, and only 3.2% compared with the same period in 2019.

The United States and the "belt and road" market leader

It is far beyond the level before the epidemic

Compared with the same period last year, in the first half of the year, China's clothing exports to major global markets except Hong Kong and Brazil increased by a relatively high margin. Exports to the United States reached 17.49 billion US dollars, a sharp increase of 65.2%, which reached the highest level in the same period in history; Exports to countries along the belt and road were 17.08 billion US dollars, up 43.9 percent; Exports to the EU were 13.91 billion US dollars, up 30.4% year on year; Exports to Japan reached US $6.94 billion, up 14.2%; Exports to ASEAN, the Middle East, Africa and Latin America increased by 43%, 39.3%, 41.6% and 44% respectively.

Compared with the same period in 2019, the clothing export to the United States, the European Union and ASEAN increased by 15.4%, 11.5% and 40.7% respectively in the first half of the year; Export growth to South Korea, Canada, Australia and other countries was close to or more than 30%; Exports to Japan were basically flat. Exports to Hong Kong, Russia and Brazil have not yet returned to the pre epidemic scale, falling by 49.1%, 17.6% and 31.3% respectively.

Leisure and sports products maintain strong growth

Fashion products return

From the perspective of clothing category, consumers' life and social style are returning, but the new crown epidemic is also having a fundamental impact on people's clothing habits. In the first half of the year, the export of T-shirts, sweaters, pants and other major categories of goods increased by more than 40%, underwear, pajamas, casual suits, etc. increased by more than 60%. Products with strong correlation with fashion such as tops and dresses also increased by more than 50%. In contrast, the growth rate of commuting related products shirts was slightly slower, with an increase of 27.2%. The export of suits and ties decreased by 8.5% and 25% respectively.

Strong growth in Guangdong

Hebei, Shandong and Fujian are growing rapidly

In the first half of the year, Guangdong surpassed Zhejiang and leapt to the first place in export provinces. The total export volume of clothing reached 15.05 billion US dollars, up 73.2% year on year, contributing 30% of the national export growth; Zhejiang and Jiangsu exported US $13.26 billion and US $10.4 billion respectively, up 25.1% and 22.9% respectively, lower than the national average growth rate; Shandong and Fujian exported US $7.88 billion and US $7.53 billion respectively, up 52.6% and 54.9% respectively, exceeding the national average growth rate; The export growth rate of Hebei, Xinjiang, Jiangxi and other central and western regions exceeded 80%.

Compared with the same period in 2019, the clothing export of Guangdong, Shandong and Fujian increased by 17.4%, 41.2% and 22.6% respectively. Zhejiang is basically flat, while Jiangsu is down 5% and has not recovered to the same period in 2019.

Outlook: the second half of the year is faced with many repeated and complex factors

In the first half of this year, with the recovery of international market demand, as well as the return of orders caused by epidemic situation in other supply countries and turmoil, China's clothing export showed a good recovery trend. Looking forward to the second half of the year, with the US $2 trillion cash subsidy effect fading, superimposed exchange rate, freight and raw material prices, the growth trend of China's clothing exports in the second half of the year is still uncertain.

Strong performance in US retail market

From the perspective of sales in the U.S. market, in the first five months, the sales of clothing stores increased by more than 70% year-on-year, and increased by 5% compared with the same period in 2019. In the first five months, the sales of comprehensive stores (including department stores and supermarkets) increased by 11% year-on-year and 13.5% compared with the same period in 2019, showing a good growth momentum. In the first five months, online retail sales in the United States increased by 22% year-on-year, 42% compared with the same period in 2019.

Weak recovery in EU market

The recovery of the EU retail market is lower than that of the US market. From January to April this year, the growth rate of EU textile, clothing and footwear retail increased month by month, reversing from a decrease of more than 20% from January to February to an increase of 130% in April. However, this is mainly due to the impact of the epidemic in the same period of last year, with a low base, which is difficult to show the current recovery of the retail market. New cases in Europe rose 10% in the last week of June, and the new coronavirus delta virus is spreading rapidly in Europe. Who warned that Europe may face a new wave of outbreak risk, and the EU retail market is expected to continue to be depressed.

The Japanese market remains sluggish

From April to June this year, the Japanese government implemented the third state of emergency. Large commercial facilities were closed down, and passenger flow and purchasing power slowed down, which had a negative impact on clothing retail in the first half of this year. In July, Japan entered the fourth state of emergency again, which will undoubtedly increase the risk of economic downturn.

In the first five months, the cumulative retail sales of textile and clothing in Japan were basically flat on a year-on-year basis, still maintaining the downturn in the outbreak of the epidemic last year. Compared with that in 2019, the cumulative retail sales from January to may decreased by 25%, showing no obvious signs of recovery.

The tightening of the epidemic situation in neighboring supply countries led to the backflow of some orders

Recently, Southeast Asian countries have experienced another outbreak of epidemic, and many factories in Vietnam, Cambodia and other countries have been forced to shut down or scale down, leading to the return of some orders to China.

In the first five months of this year, China's share of us clothing imports increased by 5.1 percentage points year-on-year, while Vietnam, Bangladesh and Indonesia decreased by 2.6, 1.5 and 1.7 percentage points respectively. China's share of EU clothing imports increased by 2% year on year, while Bangladesh's share decreased by 3%.

Clothing export growth will slow down in the second half of the year

Clothing export growth in the second half of the year is expected to be significantly lower than that in the first half.

First, the export base was large in the second half of last year;

Second, the U.S. fiscal stimulus policy is gradually weakening, and its stimulating effect on consumption is limited, and the recovery of markets such as the European Union and Japan is weak;

Third, the main international market procurement trend is to gradually reduce the proportion of procurement in China, and increase the procurement from neighboring countries. For example, in 2020, INDITEX reduced the number of Chinese suppliers for the first time, with a year-on-year decrease of 13.6%. INDITEX paid more attention to nearby procurement and production, and the number of Turkish suppliers increased by 6.4%. In the first four months of this year, Turkey and Morocco's market share in the EU increased by 1.2 and 0.4 percentage points respectively, and the share of Honduras and other Central American countries in the United States was also growing steadily. It should be noted that the current order backflow is only temporary, and the length of stay mainly depends on the degree of resumption of work and production in neighboring countries.

Fourth, the foreign demand for epidemic prevention products is gradually declining, and the price is also gradually falling, which will have less and less pulling effect on clothing export.