Looking back on 2019, due to the impact of the macroeconomic downturn and the pressure of environmental protection, most textile companies are facing production shutdowns, production cuts, and even closed doors. The companies that have persisted are mostly exploring the transformation and upgrading model at this stage. It can be said that 2019 It's not easy! I believe that textile people are more concerned about the textile market in 2020? The recent multiple positive news may allow us to glimpse some signs of the market next year.
RCEP signs next year, China's textile exports may reverse the decline
On the evening of November 4, the leaders of 10 ASEAN countries and China, Japan, South Korea, Australia, New Zealand, and India issued a joint statement after the meeting, saying that in addition to India, 15 members of the Regional Comprehensive Economic Partnership Agreement (RCEP) All text negotiations and virtually all market access negotiations have been concluded, and preparations are made to sign an agreement next year. As we all know, Southeast Asia is the fastest-growing emerging market in the textile industry. In recent years, both textile imports and exports have grown rapidly. Japan, South Korea, Australia, and New Zealand are also important textile exporting countries in China. Today's Southeast Asian textiles have sufficient labor advantages, but the infrastructure and technical level are weak. Once the agreement is signed, the complementary performance of China's and Southeast Asian textile industries will become more apparent. China ’s textile raw materials, grey fabrics and fabrics can be manufactured at lower prices. The cost is shipped to Vietnam, Malaysia and other places for processing, and the local labor force is used to make garment exports. For developed markets such as Japan, South Korea, Australia, and New Zealand, after the establishment of the RECP, textile export tariffs have been further reduced, and Chinese textiles will be more competitive than they are now.
Environmental policy gradually refined
Put an end to "one size fits all" Since September this year, the Ministry of Ecology and Environment has launched a three-month special rectification operation, focusing on correcting indiscriminate "one size fits all" behaviors in some local ecological environmental protection work, and effectively protecting the environmental rights of the people And the legitimate rights and interests of law-abiding enterprises.
On October 24th, China issued the first administrative regulation for optimizing the business environment, the Regulation on Optimizing the Business Environment. For the "one size fits all", there is a special provision in the Regulations. Except for specific circumstances, market entities must not be required to generally stop production, Suspension of business is conducive to correcting the above problems by means of rule of law.
Under the official Weibo article of the Ministry of Ecology and Environment, I also received retweets from relevant departments in various regions. It is presumed that under the guidance of national policies, the one-size-fits-all problem will gradually improve, and many companies that have stopped production in compliance will also resume operations. At the same time, for the owners of the textile and chemical fiber industry, follow the development of the textile technology innovation field, accelerate the layout of new products, new formats, increase investment in scientific and technological innovation, grasp the main features of scientific and technological innovation such as green, intelligence, and new materials, and strive to make The textile and apparel industry is developing towards high-end and diversified.
On November 25, the Ministry of Ecology and Environment forwarded the editorial of the People's Daily to criticize the issue across the board again, demanding refinement of environmental protection. And Hebei Province took the lead in establishing a positive list of ecological environment supervision nationwide, giving priority to ensuring compliance with the production and operation activities of compliance enterprises, and "non-stop, unlimited production, non-inspection, and non-disturbment" during the emergency emission reduction period for severely polluted weather. From this point of view, the national wind is changing and environmental protection policies are gradually being refined, which is good news for our textile printing and dyeing industry.
Involving 15 textile and apparel products are excluded
China's Ministry of Commerce recently stated that China and the United States have agreed to phase out tariff increases in the past two weeks. On November 7, local time in the United States, the Office of the United States Trade Representative (USTR) announced the fourth batch of product exclusion announcements under the US $ 200 billion tariff-added commodity list. This exclusion involved a total of 36 products, including 3 textile and apparel products. Tax ID. Up to now, the United States has released five batches of 200 billion product exclusion lists, of which the first batch involves two textile and apparel product tax numbers, the second batch involves three textile and apparel product tax numbers, and the third batch involves seven textile and apparel product tax numbers. The fourth batch involves three textile and apparel product tax numbers, the fifth batch does not include textile and apparel products, and the total of the above 15 textile and apparel product tax numbers.
Excluded products will no longer be subject to 301 tariffs when exported to the United States. The exclusion period can be traced back to the effective date of the 200 billion list-September 24, 2018. At present, five exemptions have been passed for 200 billion Chinese products exported to the United States, and a total of 199 products have been excluded from tariffs. In addition, the United States has launched a 300 billion tariff exclusion application on October 31, 2019. In past surveys, textile owners almost agreed that the increase in tariffs caused by the Sino-US trade friction was the main reason for the "coldness" in the textile foreign trade market this year. For textile owners, the tariffs imposed by the United States are "moving all over." Some weaving companies do not export themselves, but downstream fabric, clothing, and luggage companies purchase their products for processing and then export. However, today's 25% and even 30% tariffs are unaffordable in the production, processing and distribution of products. Now that China and the United States have begun to gradually increase the tariffs imposed on them, many orders that cannot be done now may be fulfilled. The situation in which US bills are "slashed" like this now will be greatly alleviated.
E-commerce Festival may ease downstream clothing inventory
According to relevant data, this year's "Double Eleven" chop hand festival, Tmall apparel order list, down jackets ranked top. Only three or four hours later, dozens or hundreds of models have been sold. Among them, Bosideng, Semir, Peacebird, Meibang, Antarctic and other major brands, search volume and sales have been among the best. In addition to down jackets, other women's clothing, such as woolen coats, skirt suits, etc. are also always on the hot list. From this, it is clear that people's demand for winter clothing is still great. After Double Eleven, as the temperature decreases, people ’s passion for winter clothing will once again ignite the subsequent "Double Twelve" and "New Year's Day" e-commerce festivals. For clothing companies, the e-commerce festival can ease some inventory pressure. As the end customers of weavers and traders, clothing companies have also ushered in the cold winter this year. The big reason is that the inventory is high! The inventory problem affects the turnover of the company's cash flow in the short term. If it is not resolved for a long time, it will even lead to the collapse of cash flow, and the longer the inventory backlog, the more the clothing depreciates! Therefore, "destocking" is the top priority for clothing companies.
"Only when apparel companies lower their inventory, they will come to place an order with us." Although this sentence is a bit one-sided, it also shows that the inventory of apparel companies has dropped, and the demand for fabrics and yarns will increase next year. Affected by various factors, this year's textile market is "challenging", but there are already many signs that the situation in 2020 may be better than this year. All in all, the most difficult time has passed. In the future, textile companies cannot lose confidence. They must be prepared in advance and firmly believe that difficulties are always temporary.