China's textile exports to the U.S. plummeted

by:JIYALI     2021-08-13
Due to the appreciation of the rupee, India’s export business was in chaos last year. Today, Indian textile and clothing companies seem to have a huge turnaround in the US market. Because China’s competitive advantage in the US market has weakened, Indian companies have seized the opportunity. In the nine months before December 2007, Indian textile and apparel exporters faced negative growth in the US market. In dollar terms, the growth rate was only 0.53% in January 2008. The situation improved in February, with an increase of 8.26%.  India and other major textile producing countries, such as China, Bangladesh and Vietnam, after the abolition of quotas in 2005, textile and clothing exports to the quota markets (the United States and the EU) immediately increased significantly. However, in April 2007, the Indian rupee suddenly appreciated and the growth trend was reversed, but exports from other countries continued to grow. The largest supplier of textiles and clothing to the United States is China. China’s textile and clothing exports to the United States were 32.3 billion U.S. dollars, or one-third of the total U.S. textile and clothing imports in 2007. In contrast, India’s exports were 5.1 billion U.S. dollars. From January to February 2008, exports to the United States showed negative growth (-2.57%). Perhaps, China will experience negative growth in exports to the United States for the first time in more than 10 years.   Why has there been a change? Because it is repeating history. In the course of its development, the global textile industry base has been constantly shifting. As the economic development surpasses a certain level, it no longer adapts to the labor-intensive textile and clothing industries. Earlier this kind of history happened in Japan, and earlier, it happened in the United States and Europe.   Now, China has begun to reduce its textile industry. For other competing textile producing countries, such as India, Vietnam and Indonesia, this is an opportunity. Taking India as an example, this is a real opportunity for at least the next 20 years (before India discovers that textile production no longer matches the economy).   Now history is beginning to repeat itself in China, and the Chinese textile industry is declining. China's raw material (cotton) base is decreasing. China’s cotton consumption is almost three times the 4.5 million bales imported from India. While India’s production has increased substantially in recent years, China’s cotton plantation area has been decreasing. On the contrary, China’s policy has focused on food.   More importantly, whether to recognize that the economic transfer theory of the textile industry is superfluous, the wages of China's textile and garment industry are increasing. Traditionally, Chinese wages are 30% higher than India’s, but the percentage is now expanding. The wages of China’s unskilled and skilled workers are growing faster than India’s.   Even in terms of exchange rate, China’s situation is not as good as India’s. From March 2007 to March 2008, the renminbi appreciated by 8.25% against the U.S. dollar, while the rupee appreciated by 8.36% during the same period. Indeed, a large amount of cloth produced in China is shipped to Vietnam to be produced into clothing. Therefore, Vietnam has become a major exporter to the United States, with exports reaching 4.6 billion U.S. dollars in 2007. However, analysts believe that China's indirect exports will also regress in the next few months, leaving India and other countries with a large share of the US market. India’s fiscal policy aims to improve the global competitiveness of India’s textile and apparel industry. If the state-level tax can be refunded to exporters, the textile industry will definitely gain an advantage in the global market.    According to industry officials, the Indian textile and apparel exporters’ The main problem is the sudden appreciation of the rupee. It is said that the textile industry has digested the fluctuation caused by the rise of the rupee. Now, although the rupee is still strong, the textile industry has regained its vitality.
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