China’s textile industry suffers from eroding profits, orders flow to Vietnam and India

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Due to shrinking global markets and subsequent slump in demand, China’s textile industries have suffered profit erosion throughout the pandemic period and will continue to suffer losses from rising material prices. firsts, reads a report by the First Finance and Economics Daily of China.

The report revealed that since the beginning of 2020, the textile industry is suffering massive losses as the industry is unable to raise product prices due to the pandemic.

In addition, orders are 40% lower than last year, the report adds.

According to the China Chamber of Commerce for Textile Import and Export estimate, the magnitude of China’s textile and apparel order transfer was about 6 billion US dollars in the first half of 2020, whose transfer scale of cotton textile orders was about 1 billion US dollars.

According to the report of First said the Chinese Finance and Economy Daily.

Meanwhile, more than 90 percent of enterprises said the current order schedule was shortened compared to the second half and fourth quarter of last year, and nearly 59 percent of enterprise orders are scheduled for 13 months.

According to import and export data, the growth rate of apparel and home textile products in China showed a relatively obvious slowing trend, as industry insiders revealed that this year most orders from garment factories will be completed by September.

Due to industrial transformation and upgrading, changes in the industrial chain layout, and the impact of tariffs imposed by the United States on China, there has been an outflow of Chinese export orders. before the outbreak of the COVID outbreak, however, production continued only until November.

According to data from the U.S. Department of Commerce, China’s share of U.S. cotton textile and apparel imports in 2021 fell from 23.5% in 2019 to 17.1%, and its share of apparel imports in cotton fell from first place in 2019 to second place, and Vietnam became the second major supplier.

China’s share of US imports of cotton textiles and apparel fell to 15.3%, overtaken by Vietnam, Bangladesh followed by India.

In fact, the main reason for the weak market was the lack of demand as the consumer market was frozen due to epidemic prevention and control and shrinking overseas markets.

Cotton textile orders are mainly transferred to India and clothing orders are mainly transferred to countries such as Bangladesh, Vietnam, India, Indonesia and Cambodia. The China Chamber of Commerce for Textile Import and Export recently conducted a business survey, and 85 percent of businesses said outward migration of customer orders was obvious, the report said.

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