In May of this year, my country's exports showed negative growth for the first time, and the trend of slowing growth will continue. From the beginning of the year to April, the monthly exports of textiles and garments all achieved growth, but the growth rate has declined month by month since March, with a negative growth of 16.8% for the first time in May. After removing the anti-epidemic materials, exports in the month increased by 72.8%, which was a smaller increase than in the previous period. Since the second to third quarters of last year were the peak of exports, it is preliminarily predicted that the trend of slowing or even declining monthly exports year-on-year growth rate will continue until the end of the third quarter.

The global vaccination rate has increased by 12% monthly, and external demand is expected to pick up further in the second half of the year. As of June 24, according to Oxford University statistics, more than 2.8 billion doses of new crown virus vaccines have been reported globally, with an inoculation rate of 22.59%, an increase of 12 percentage points from May 24. Among them, the vaccination rate in developed economies generally reaches more than 40%. Some experts predict that based on the current vaccination rate, the European Union will be able to achieve herd immunity in the second half of the year. By then, the major economies' demand for textiles and clothing will further return to normal.

The short-term fluctuations of the RMB exchange rate have been repeated, and the long-term appreciation trend remains irreversible. In mid-June, the Federal Reserve issued a signal to raise interest rates, and the US dollar index rose rapidly. At the same time, the unilateral appreciation of the renminbi against the U.S. dollar came to an end, driven by factors such as the adjustment of the central bank’s monetary policy and the decline in the support of the renminbi from the current account surplus. On June 24, the central parity of the RMB exchange rate against the US dollar was reported at 6.4824 yuan, a depreciation of 203 points, marking the eighth consecutive day of devaluation, with a cumulative depreciation of 968 points. Compared with the high point in early June, the accumulated depreciation was 1252 points. In the short and medium term, two-way fluctuations in the RMB exchange rate will become the norm. In the long run, China's economic growth rate and labor productivity increase have laid a good foundation for the increase in the purchasing power parity of the renminbi, which determines the long-term appreciation of the renminbi. Enterprises must pay attention to the long-term and short-term trends of the RMB when conducting foreign trade activities, adjust their business strategies in a timely manner, and formulate long-term plans for exchange rate trends.

From January to May, the national textile and apparel trade volume was 126.53 billion U.S. dollars, an increase of 18.3% year-on-year. Among them, exports were US$115.11 billion, an increase of 17.7%, an increase of 15.7% over the same period in 2019; imports were US$11.42 billion, an increase of 24.6%, an increase of 13.2% over the same period in 2019, and the cumulative trade surplus was US$103.69 billion, an increase of 17%, compared with the same period in 2019. An increase of 15.9%.

In May, the national textile and apparel trade volume was 27.01 billion U.S. dollars, a year-on-year decrease of 13.5%, a year-on-year increase of 4%, and a month-on-month increase of 3.2%. Among them, exports were US$24.84 billion, a decrease of 16.8%, an increase of 4.3% over the same period in 2019, and an increase of 4.5% month-on-month; imports were US$2.17 billion, an increase of 59.1%, an increase of 1% over the same period in 2019, and a month-on-month decrease of 9.4%. The trade surplus for the month was 22.67 billion US dollars, a decrease of 20.4%, an increase of 4.6% from the same period in 2019, and a month-on-month increase of 6%.

Textiles became the main reason for the decline in exports that month

With the combination of factors such as the slight improvement in external market demand, the continued decline in the export of epidemic prevention materials, and the large year-on-year base, in May, the export volume of textiles and clothing continued to rise. The month-on-month export maintained growth, but the export experienced a negative growth for the first time in the same year. An increase of 4.3% compared with the same period in 2019, the growth rate was significantly lower than the previous period.

The decline in the month was mainly dragged down by textiles. The decline in textiles reached 40.8%, an increase of 5.3% compared with 2019. Apparel increased by 37.6%, an increase of 3.5% compared to 2019.

The follow-up weakening of the growth of exports to the EU and Japan

The U.S. and ASEAN markets have maintained relatively stable and sustainable growth, and the follow-up growth in exports to the EU and Japan is weak. In the second month of the second quarter, the growth momentum of textile and apparel exports to major markets has weakened. It can be clearly seen from the chart below that in April, my exports to all the four key markets and bulk commodities basically showed a slowdown or The downward trend is expected to remain until the end of the third quarter.

As the largest export market of China's textile and apparel, the United States still plays a prominent role as a "stabilizer" in the market. From January to May, China’s exports to the United States reached US$20.12 billion, a year-on-year increase of 23.3% and a year-on-year increase of 23.4%. Among them, the key commodity knitting and woven clothing increased by 62%, down 1.8% from 2019, and basically returned to the level before the epidemic.

EU market demand has rebounded, but the stamina is insufficient. From January to May, China’s textile and apparel exports to the EU were US$16.57 billion, a year-on-year decrease of 15% and an increase of 18.5% over the same period in 2019. Among them, the key commodity knitted garments increased by 30.9%, an increase of 6.7% over 2019. Among them, the export growth momentum was insufficient in May, and there was a 16.4% decline.

The Japanese market is volatile and there is limited room for growth. From January to May, China's textile and apparel exports to Japan fell by 8.9% year-on-year and increased by 9.2% year-on-year. Among them, the key commodity knitted garments increased by 8.4% year-on-year, and decreased by 2.7% from 2019.

The ASEAN market is relatively stable, and exports have maintained double growth. From January to May, China's textile and apparel exports to ASEAN increased by 42.2% year-on-year, and 23.4% year-on-year. Among them, key commodity yarn fabrics increased by 41.4% year-on-year and 5.9% year-on-year.

The share of Chinese products in the three key markets remains relatively high, and the share of European and American markets is still higher than that of the same period in 2020 and 2019, while the Japanese market has fallen slightly.

From January to March, the EU’s 27 countries imported 33.01 billion U.S. dollars from the world, an increase of 10.7%, and their imports from China increased by 34.2%. China accounted for 35.1%, 6 percentage points and 5.2 percentage points higher than the same period in 2020 and 2019, respectively.

From January to April, the United States imported 42.79 billion US dollars from the world, an increase of 25.1%, and its imports from China increased by 43.4%. China accounted for 30.9%, which was higher than the same period in 2020 and 2019. Among them, textiles accounted for 36.8%, lower than the same period in 2019 and 2020, and clothing accounted for 28.8%, both higher than the same period in 2019 and 2020.

From January to April, Japan’s imports from China fell by 4%, and China’s share was 55.1%, which was lower than in 2020 and the same period in 2019. Among them, textiles accounted for 57.8%, lower than the same period in 2020, higher than the same period in 2019; clothing accounted for 55.2%, higher than the same period in 2020, lower than the same period in 2019.

The decline in exports of epidemic prevention materials further expands

The decline in the export of epidemic prevention materials has further expanded, and the export of major clothing commodities has maintained a good growth trend. In May, the export of textile anti-epidemic materials continued to decline, and the decline was further expanded. The decline in medical masks and medical protective clothing in the month reached 93.4% and 86.4%, respectively, driving the cumulative exports from January to May to decline by 75.1% and 44.7%, respectively.

Textiles were affected by the decline in exports of masks. In May, exports fell by 40.8%. After removing the masks, the actual increase was 71.5%, an increase of 1.6% over the same period in 2019. Among them, yarn fabrics increased by 82.3% in total, a decrease of 5.6% compared with the same period in 2019. From January to May, the cumulative export of textiles fell by 2.9%, and the actual increase was 48.3% after removing the mask, which was an increase of 9.4% compared with the same period in 2019. The total increase of yarn fabrics was 45% and an increase of 2% compared with the same period in 2019.

Although clothing is also affected by protective clothing, the export growth momentum is strong due to the recovery of external demand. In May, exports increased by 37.6%. After removing the protective clothing, the actual increase was 74.2%, an increase of 2.7% compared with the same period in 2019. Among them, the total growth of knitted garments was 38.2%, an increase of 4% compared with the same period in 2019. From January to May, the cumulative export of clothing increased by 48.2%. After removing the protective clothing, the actual increase was 56.9%, an increase of 12.1% compared with the same period in 2019, of which the total increase of knitting garments increased by 41.4%, and an increase of 7.2% compared with the same period in 2019.

Note*: Masks and protective clothing are based on China Customs HS 8-digit statistics, and the statistical caliber is slightly larger.

The year-on-year growth rate of exports from major provinces and cities slowed down

From January to May, the exports of key export provinces and cities (regions) across the country continued to grow. The top five exports of Zhejiang, Jiangsu, Guangdong, Shandong and Fujian all achieved rapid growth year-on-year and compared with the same period in 2019. However, from the perspective of a single month, the export growth trend has dropped significantly. The top five provinces and cities in Jiangsu, Guangdong, and the central and western Guangxi, Hunan, Henan and other places have negative growth year-on-year and 2019. Most other regions The growth rate has also dropped significantly.

There is a big gap between textile imports and the year before

Apparel imports continue to grow, and the gap between textile imports and the level of the same period in 2019 has further widened. Clothing imports have shown a good development trend, achieving sustained and stable growth. In May, clothing imports increased by 80.7% and 34.2% year-on-year and compared with 2019, respectively. Among them, knitted garments increased by 85.9% and 27.8% respectively. From January to May, clothing imports increased by 58.9% and 46.2% year-on-year and compared with 2019, respectively.

The monthly textile imports rebounded slightly year-on-year, with an increase of 48.1% in the month, an increase of 18 percentage points from the previous month, but a decrease of 12.3% compared with 2019, and the decline continued to expand from the previous month. Among them, the total volume of commodity yarn fabrics fell by 15.3%. From January to May, textile imports increased by 7.4% year-on-year, down 3.1% from the same period in 2019.

Textiles grew by 7.4% year-on-year, which was a drop from the cumulative increase last month, and was 3.1% lower than in 2019.

Cotton imports fall in volume and prices rise

In May, cotton imports continued to fall, with imports of 173,000 tons that month, an increase of 147% year-on-year. The price of imported cotton has risen month by month, and the average import price in May rose to US$1,980/ton, a new high since last year.

From January to May, cotton imports grew rapidly as a whole, with a total of 1.374 million tons imported from the world, an increase of 70% year-on-year. Imports from the United States, Brazil, India and Burkina Faso all achieved growth, while imports from Australia fell by 70%.