According to statistics, in the first quarter of 2019, EU garment importers have moved out of China, and China’s garment exports fell by 10.2% year-on-year; in the second quarter of 2019, EU apparel imports of knitted and woven garments fell by 5% and 5.3% respectively (EU Clothing imports declined slightly year-on-year, but the decline from China’s imports was more pronounced than in other regions.
According to the statistics of the US Department of Commerce, US apparel imports to China increased by more than 3% year-on-year in January-June 2019 (down 1.4% in the same period of last year), and US apparel imports to other regions increased by 5.1% year-on-year. This shows that the United States’ import of clothing to China has not only decreased but has continued to grow, because the Chinese textile industry has unparalleled advantages in terms of capacity and reliability, and high cost performance. In the imported cotton-based garments from January to June this year, China’s average export unit price fell by 7%, while the unit price of other places increased by 9.4%.
Then why did the EU not impose tariffs on Chinese textile products, but imports gradually “dropped”? The author’s views include the following points, and the situation of “the boss is second, the third child is injured” will continue.
First, the EU economy is in dire straits, and consumption growth in textiles and clothing is weak or even declining. Due to the sluggish manufacturing industry and the weakening of the global economy, coupled with the trade war and the impact of Brexit, the continued low inflation rate in Europe triggered a general downward trend in economic growth. The market expects that the euro zone’s economic growth rate will be 0.2% in the second quarter, which is halved from 0.4% in the first quarter, hitting a new low in four years; the year-on-year growth rate was 1.2%, down 0.1% from the first quarter. The main reason for the decline in growth rate is the lack of household consumption and public spending. Therefore, in desperation, the European Central Bank restarted quantitative easing and launched a monetary policy package to stimulate economic growth. The next step was to prevent the European economy from falling into recession, especially deflation;
Second, due to the Federal Reserve’s interest rate cuts (global central banks have “opened the floodgates”), the euro and the pound continued to depreciate, and prices of Chinese textiles and clothing increased significantly. In euro terms, the unit price of EU clothing imports rose in the second quarter, the unit price of Chinese products rose 9.8%, Bangladesh rose 9.4%, Vietnam rose 15.1%, and in dollar terms, India clothing fell 1.1%, Turkish clothing fell 4.1% ;
Third, the EU insists on importing the rules of origin to make China’s textile exports subject to certain restrictions (using local raw materials), and the difficulty of exporting to Hong Kong through Hong Kong and other production sites has increased. It is understood that in order to circumvent the EU’s restrictions on China’s textile and apparel exports, tariffs, etc., some domestic enterprises have exported to the EU through China’s Hong Kong region, Southeast Asia and other countries (the Chinese side or invested in building factories), but the rules of origin have tightened from China. Textile companies are a headache; Pakistan, India, Central Asia and other countries have benefited a lot.