In 2023, global geopolitical tensions are prolonged, and local conflicts and instability are frequent. World economic growth is lacking momentum and recovery is slow. Core inflation is high and demand is falling in the major advanced economies. The so-called "decoupling" and "de-risk" strategies pursued by the US and Europe have exacerbated the fragmentation of the world economy and hindered the development of global trade. Natural disasters occur frequently and have an increasingly significant impact on the global economy and trade. In the face of a complex and severe international environment and arduous tasks of reform, development and stability at home, China fully implemented the new concept of development, accelerated the establishment of a new development pattern, comprehensively deepened reform and opening up, and prevented and defused risks. The national economy rebounded and grew by 5.2% this year.

Under the new situation, the global textile and garment industry chain and supply chain pattern are accelerating the adjustment and reshaping, and the unstable and uncertain factors facing China's textile and garment foreign trade are increasing. Factors such as declining demand in key markets, "decoupling and chain breaking", changes in international trade patterns, regional conflicts disrupting international shipping, and fluctuations in the RMB exchange rate continue to pressure the textile and garment trade. In the face of challenges, the central and local governments at all levels continue to introduce and implement the "steady foreign trade" policy, the textile and garment foreign trade industry and enterprises based on industrial advantages, break and work together, seek new progress, actively expand emerging markets, innovate trade methods, and seek ways to develop under the new situation. Although the annual trade volume of textile and garment declined from the previous year, it still achieved good results, achieving a total import and export of 315.35 billion US dollars, down 7.7%. Among them, exports were 293.64 billion US dollars, down 8.1 percent year-on-year and up 10.5 percent from 2019 before the epidemic. Imports were 21.71 billion U.S. dollars, down 3.1%; The trade surplus was US $271.93 billion, down 8.4%.

1. Exports fell throughout the year, but still achieved the third best performance in history; At the end of the year out of the trough, gradually stabilize.

In 2023, China's textile and garment export enterprises are facing the double pressure of order reduction and order transfer. On the one hand, affected by the decline in demand in traditional developed markets such as Europe and the United States, high inventories and the loss of customers during the three-year epidemic, new orders of enterprises have decreased. The decline in European and American market demand has become the difficulty and challenge faced by textile and garment export enterprises. On the other hand, due to the implementation of "decoupling" and "de-risk" strategies in Europe and the United States, the trend of "friend-shore" and "nearshore" procurement is obvious, and some orders are transferred to Southeast Asia, South Asia, Turkey, Egypt and Mexico, and other places, enterprises are facing increasingly fierce external competition, resulting in the overall decline of China's textile and garment exports in 2023.

From the perspective of the annual trend, with China's announcement of full liberalization of the novel coronavirus epidemic prevention and control in December 2022, textile and garment production and trade will gradually return to normal in 2023. Benefiting from the release of the previous backlog of orders, in March and April, textile and garment exports stopped falling, after May, due to the gradual release of early orders, coupled with typhoons and floods in July, many southeast coastal areas of China were forced to stop production, port shutdown, and the impact of a high base in the same period last year, textile and garment exports accelerated decline. The May-August period saw four consecutive months of double-digit declines. After September, benefiting from the deepening of China's "steady foreign trade" policy, the gradual decline of the base in the same period last year, the continued digestion of inventories in Europe and the United States and the U.S. economy is better than expected, demand has recovered and other positive factors, exports as a whole showed a good trend of stability, and in December it was a rebound, up 2.6% year-on-year. The annual export volume was the third highest in history, and the overall trend was "N".

Second, the diversification of export markets continued to advance, the "Belt and Road" co-construction countries became the main export growth point, exports to the United States, Europe and Japan declined, Vietnam surpassed Japan for the first time to become the second largest single market.

In 2022, ASEAN will surpass the United States to become China's textile and apparel export market. Although the United States, in order to prevent the "transfer effect" caused by Chinese enterprises' investment in Southeast Asia, has reduced orders from Southeast Asia, indirectly leading to a decline in intermediate exports such as yarns and fabrics to ASEAN countries, ASEAN will still maintain its export market position in 2023. For the whole year, China exported 49.8 billion US dollars of textile and apparel to ASEAN, down 9.1% year on year, accounting for 17% of China's textile and apparel exports. Key export products yarn fabrics total exports of 24.61 billion US dollars, down 10.9%. In 2023, I exported 17.65 billion U.S. dollars to Vietnam, and Vietnam surpassed Japan to become my second largest single market.

The U.S. economy grew better than expected in 2023, with the economy expanding 2.5 percent for the full year, up from 1.9 percent in 2022. The resumption of high-level exchanges between China and the United States has stopped the downward trend in bilateral relations, but the United States has not changed its strategy of "decoupling" from China and diversifying its procurement. In 2023, China exported 47.09 billion US dollars of textile and apparel to the United States, down 11.1% year-on-year, accounting for 16% of China's exports. Key commodities needle woven clothing exports fell 12.1%, of which, the export volume fell 7.1%, export prices fell 5.4%. From the perspective of the annual trend, since September, China's exports to the United States have stopped falling and rebounded, and exports have maintained year-on-year growth for four consecutive months from September to December.

Affected by regional conflicts, energy crisis and other factors, the EU economy is Mired in trouble, and the leader of the German economy is facing the risk of recession. Our textile and garment exports to the EU have been declining. In 2023, exports to the EU were 38.01 billion US dollars, down 17.6% year on year, and the EU's share in China's export market dropped to 12.9%. The export price of the major commodity needle woven clothing fell, the export value of 23.15 billion US dollars, down 20.4%, of which the export volume fell 11.8%, and the average export price fell 9.8%.

In recent years, the trend of Japan's transfer of orders to Southeast Asia is obvious, and our exports to Japan continue to decline. In 2023, China's textile and apparel exports to Japan were 17.08 billion US dollars, down 14.2% year-on-year, and Japan's share in China's export market fell to 5.8%, and fell to the third largest single market. The major commodity needle woven clothing exports were 11.11 billion US dollars, down 13.6%, of which the export volume was down 8.7%, and the average export price was down 5.4%.

The year 2023 marks the 10th anniversary of the Belt and Road Initiative. Over the past 10 years, trade cooperation between China and the countries under the Belt and Road Initiative has developed rapidly.  In 2023, I exported 159.14 billion US dollars of textile and apparel to the countries jointly built by the "Belt and Road", down 4.1% year-on-year, lower than the decline in my overall exports, and the proportion of the "Belt and Road" market in my exports increased to 54.2%. Central Asia, the Middle East, Southeast Asia and Africa have become regions with faster growth in China's textile and garment exports. In 2023, China's exports to Kazakhstan, Russia, Malaysia, Saudi Arabia, Singapore, Iraq, Kenya, Algeria, Tanzania and other countries maintained growth, of which exports to Kazakhstan, Algeria and other countries increased by more than 50%.

Third, the import of terminal consumer goods in developed markets has generally declined, and the outsourcing trend of supply chains near and near shore is obvious, and the share of our products in developed markets continues to fall.

Affected by persistent inflation and high inventories, imports of terminal consumer goods and clothing in developed economies such as the United States, Europe and Japan continued to weaken, with double-digit year-on-year declines in the United States and Europe and single-digit declines in Japan. From January to November, the United States imported 80.39 billion US dollars of clothing, down as much as 23.4%; Eu imports amounted to US $86.38 billion, down 14.1%; Japan's imports were $23.14 billion, down 5.4%. Imports from other major importers except China also fell, such as US imports from Vietnam, Bangladesh, India and Indonesia all fell by more than 20%, and imports from Mexico fell by 10%. Eu imports from Bangladesh, Turkey, India and Vietnam also fell by double digits. The Japanese market declined by about 6% from Bangladesh and Cambodia, while imports from Vietnam and Myanmar maintained growth. At present, the United States purchase orders are mainly tilted to North and Central America, the European Union is mainly tilted to Bangladesh and offshore Turkey in South Asia, and Japan is mainly tilted to Vietnam, Bangladesh and Myanmar. The share of China's products in the three traditional markets of the United States, the European Union and Japan fell further, falling to 25.5%, 29.2% and 52.4% from January to November, respectively, down 1.1, 2.3 and 3.4 percentage points from the same period last year.

Fourth, the export price trend of major commodities diverged, and the export volume growth failed to make up for the decline in exports caused by the decline in prices.

The export volume of major commodity yarns, fabrics and home textiles maintained growth, increasing by 10%, 0.8% and 7.7%, respectively, and the export volume of needle woven clothing decreased slightly by 0.6%. However, the export prices of all four categories of commodities fell, yarn export prices fell 16.9% year-on-year, fabric prices fell 8.6%, home textile prices fell 7.5%, and needle woven clothing prices fell 7.4%. The main reasons for the price decline are: First, affected by supply chain bottlenecks and other factors in 2022, the year-on-year base is increased due to a large increase in export prices; Second, the market demand is reduced, and the high inventory causes importers to increase their price sensitivity, especially for standard products such as yarn, and the ability to negotiate and transmit prices to the downstream is relatively poor; Third, the interest rate gap between China and the US widened, and the RMB exchange rate depreciated against the US dollar during the year. Fourth, the proportion of cross-border e-commerce exports with lower unit prices has increased, and the overall export price has been lowered. Fifth, the industry competition is fierce, the phenomenon of price internal volume is serious, and corporate profits are shrinking.

5. The export of traditional exporting provinces and cities in the east declined, while the export of central and western provinces and cities such as Xinjiang, Guangxi, Hubei and Sichuan rose against the trend.

Among the 31 provinces, regions and municipalities (excluding Hong Kong, Macao and Taiwan), 12 provinces and municipalities maintained export growth, all of which were in the central and western regions. Among them, the export of Xinjiang, Guangxi and Hubei increased by 29%, 28.5% and 18.2% respectively, ranking 7th, 8th and 9th in the country. Sichuan and Heilongjiang led the way in export growth, increasing by 43.9% and 45.4%, respectively. The top six provinces and cities in the east are still ranked by exports, but their exports all declined. Among them, Zhejiang Province fell by 4.6%; Jiangsu, Guangdong, Shandong, Fujian and Shanghai ranked second to sixth, with declines of 13.9 percent, 14.9 percent, 10 percent, 17.9 percent and 12.3 percent respectively. Hebei ranked 10th in terms of exports, down 11.8 per cent year on year.

6. The decline in imports narrowed significantly compared with last year, and the increase in cotton yarn imports became the main factor driving imports.

In 2023, China's imports of textile and apparel were 21.71 billion US dollars, down 3.1% year-on-year, lower than the decline in exports, and much lower than the decline in imports in 2022 (19.1%). The decrease in imports was mainly due to the increase in imports of yarn, especially cotton yarn, in order to avoid the so-called "Xinjiang-related Act" in the United States. 2023 China's imports of yarn 5.98 billion US dollars, an increase of 13.2%; Among them, the import of cotton yarn was 4.39 billion US dollars, an increase of 21.7%, and the import of cotton yarn from India, Pakistan and Uzbekistan increased by 248.5%, 46.7% and 20.3% respectively. Compared with yarn, fabric and needle woven clothing and other categories of commodity imports fell, of which fabric imports fell 13.6%, needle woven clothing imports fell 3.4%.

Looking ahead to 2024, the external environment will remain grim and complex, and the global geopolitical landscape will continue to be impacted. The war between Russia and Ukraine has reached a stalemate with no sign of an armistice. The Palestinian-Israeli conflict is complicated and unpredictable; The United States and many other countries are coming to the "election", which will have a profound impact on global trade policy. In terms of economy, the growth momentum of the world economy is insufficient, the International Monetary Fund predicts that the global economy will grow by only 2.9% in 2024, facing the risk of "stagflation", the foundation of economic recovery in the United States is not yet solid, and the prospect of economic recovery in the European Union is hardly optimistic. Under the new situation of global politics and economy, countries around the world may advocate more "independent" trade policies, and global trade "deglobalization" and fragmentation are expected to intensify.

The year 2024 marks the 75th anniversary of the founding of the People's Republic of China and is also a key year for the implementation of the 14th Five-Year Plan. The Central Economic Work Conference stressed that in 2024, we should focus on high-quality development, highlight key points, grasp key points, encourage innovation, focus on expanding domestic demand, deepen reform in key areas, and expand high-level opening up. In 2024, China's textile and garment foreign trade industry or will still face the challenge of insufficient external demand and declining orders, but I believe that as China's economy continues to stabilize and improve, the industry can base on the advantages of China's textile and garment industry chain complete and supply chain stable, seek opportunities in the crisis, and promote digital intelligent, green and low-carbon transformation through improving quality and efficiency, to achieve high-quality development. Foreign countries continue to increase the development of emerging markets, through innovative trade methods, expand the scale of intermediate exports, accelerate cross-border e-commerce to maintain the sustainable, healthy and stable development of the industry. It is initially expected that in 2024, especially in the second half of the year, textile and apparel exports will gradually stabilize and resume growth.

Source: China Textile Import and Export Chamber of Commerce