——Brief Analysis on Foreign Trade Index of June. 2009
(Chart 1)
(Chart 2)
As Chart1 and Chart 2 shows, foreign trade prosperity index of June, 2009 closed at 1549.29 points, up 4.82% from last month in a slight upward tendency; The price index of foreign trade closed at 71.80 points, up 4.1.80% from last month and tending to rise slightly. Foreign trade confidence index closed at 976.85 points, up 0.21% from last month and tending to climb up. Compared with that in May, foreign trade prosperity index, foreign trade price index and foreign trade confidence index tended to grow very slowly.
A. The textile foreign trade prosperity index of June, 2009 rose slightly.
1. Shaoxing county's export in carpets, blankets and other goods increased against the adverse situation. Though affected by the financial crisis and the shrinking demand for textiles in the international market, Shaoxing county's export in carpets, blankets and other goods increases against the adverse situation, and a larger market has been developed in the Middle East, Africa, South America and other emerging markets. They become the two items growing fastest in the export of Shaoxing city, showing a promising future. As the barriers in textile trade increase constantly, the increase in Shaoxing county' export in carpets and blankets ascribed to the "sensor" role taken by China Textile City which let Shaoxing county's textile enterprises know the market demand at the first time and develop marketable commodities. For instance, by setting up the salesroom in China Textile City, "Saibo Home Textile" obtained the information on foreign clients' demand and developed s series of new carpets. An American client placed an 7-month order at one time and paved the blue carpet on the floor of VIP seats while president Obama made his inaugural speech on Capitol Hill. Meanwhile, designing diversified marketable products is also the key element for Shaoxing's blanket manufactures to exploit international market. Shaoming Carpet Corporation in Qixian Town, Shaoxing county has received considerable numbers of orders from India and the Middle East. This year, the company exports one container of carpets every three or four days on average. Clients demand for more supply constantly, the manufacture of orders has been scheduled till August. "Shaoming Carpet" by combining high technology with traditional art professionally produces carpets, household blanket and craft carpet etc, which makes the export revenue hit a record every month. "Xingheng Textile" decides to raise the output of the major product pilgrimage carpet from 50% to 90% of the total output according to the current production scale and customer group. Analysing from the production situation of this year, a lot of carpets and blankets manufacturers in Shaoxing county are very optimistic upon the future.
2. Shaoxing Zhongxin Textile Corporation has arranged the production for orders till August. After attending 2009 China Keqiao Spring Exhibition, the company has obtained orders nearly US $ 3 million from buyer visitors, and over 10 new clients will place orders soon. Although 90% of "Zhongxin Textile" products are the conventional products in the market, the products tend to sell steadily in an uptrend, the orders have been arranged till August, this year. Though entering the low-profit era, the conventional products are still in large demand for the convenience in production and low costs compared with new products. If the conventional product is marketable, how much profit the supplier can get is the only thing to care about. However, enterprises can not develop without new products, producing high value-added products is also essential to enterprises. Therefore, the proportion of conventional products to new products should be controlled to 9:1. Hit by the financial crisis, enterprises should put survival first and development second. Though the recession is prevail in the Europe, the U.S. and other developed countries, there has a good situation in South American countries such as Brazil. The products these markets demand are the conventional products "Zhongxin Textile" never give up. The good insight in product structure helps "Zhongxin Textile" win more markets, and the good judgement on the market creates the efficiency directly. In the early period of this year, when the prices of grey cloths dropped low, the head of the company immediately felt this was a good chance to purchase large volumes of grey cloths. Finally, after ensuring the normal production, the company stored over 2 million metres of grey cloths. It is proofed to be true that in early May, the price of grey cloth rose about 0.5 yuan/metre. Now, the salesmen of "Zhongxin" quote the price firmly and obtain orders owing to the advantage over the cost.
B. The textile export price index of June, 2009 rose up slightly.
1. There has an originality, there has a market. Powerful originative strength boosted foreign trade in adversity situation. Binxin Textile Corporation in Jinchang Central Building has 25 designers who release 10 new patterns each day. Now, the company already stands firmly in Southeast Asia, Dubai and other markets. Since the establishment last May, the company has an increase in business which grows by 15% month on month. The related responsible person of the company thinks that in order to keep the market, the company must use its powerful weapon that is the capability of original design in the financial crisis. For this reason, though already having over 10 designers, the company hired another more than 10 designers paid by high salary to develop original embroidered patterns by hand-painting and making plate etc. In the high-end market, the patterns prevail in a short time and then are quickly replaced, so the company should change themselves so as to make sure that the client's patterns can go ahead of fashion trend. Though the company pushes out more than 10 patterns, only one or two patterns can be accepted by the market. But they will never give up. Pattern design is one part of the originality. "Binxin Textile" is active in developing the originality to "the two ends": cooperate with some famous enterprises and inject more innovative elements to grey cloths in order to be in line with the fashion trend; optimize the finishing process constantly so that the added-value fabrics increases by about 20%. Supported by the originality, "Binxin Textile" stands out in just one year. Many clients at home and abroad visit the company, and the company develops agents in Southeast Asia, Dubai and other regions.
2. Fabric sellers of China Textile City develop themselves by registering overseas trademarks to raise added value of products. From this year, three foreign trading companies of China Textile City has registered overseas trademarks in many countries. Companies invest large amount of money to register overseas trademarks, aiming at creating brands and enhance the competitiveness in overseas markets. In textile industrial circle, "difficult to create brands, difficult to build brands" spread wide. In the past, in China Textile City, many companies dare not "create brands", let alone register international trademarks. Whereas, with the influence of RMB exchange rate rising up, frequent international trade friction and other adverse factors, fabric sellers of China Textile City are changing their minds and become very enthusiastic on developing independent brands and raising added value of products. China Textile City Zhongjia Fabric Industry Co., Ltd. has successfully registered 18 "Zhongjia" trademarks overseas. Though the products have been very popular in the place of registration, "Zhongjia" will have a higher reputation through trademark registration, so that the overseas market shares can be maintained, the added value of products can be lifted up and the power to price products can be enhanced. At present, China Textile City's export by brand is in the first stage. As the statistics shows, "Shuida", "Spring & Summer & Autumn & Winter" and "Zhongjia" of China Textile City has already registered 56 overseas trademarks. Brand is a intangible asset for owners to quote higher prices and get more added value. It all originated from the good image in consumer's heart. China Textile City's textile products can be exported to all over the world partly because of low prices. However, in face of new export situation, raising added value is getting more important, and registering overseas trademark can achieve the goal.
Foreign trade prosperity index and foreign trade price index are expected to decline slightly in July. The trade protectionism may start again, some trade barriers to Chinese textile and garment export will appear, anti-dumping and countervailing petitions will be proposed.In addition, as foreign demand shrinks rapidly together with the exceeding production capacity at home, Chines textile industry will be reshuffled inevitably. Although the cheap labour cost makes the export prices competitive, the advantage is getting weak as the textile industries in surrounding countries in Asia rise up; Particularly, he pressures on the cost such as the soaring cost on raw materials, labor cost and appreciation of RMB not only squeeze the profit margin of manufacturers but also reduce the competitiveness of Chinese textile and garment in export. As the traditional off-season of textile market appears in July, the export of popular products sold in large quantities are not optimistic, small and medium-sized companies will face severe challenges. The price advantage in lots of exported products continues to become weaker, the competitiveness declined, so some small and medium-sized textile companies will have more pressures and challenges when exporting. But the squeeze in price only takes the active role temporarily, companies should focus on creating brands and technique innovation in a long run. Order's shrinking accelerates the reshuffle within the industry, the companies who only reduce prices but neglect product quality will be easily out from the game, the orders will flow to the companies who can provide quality products. According to the analysis of experts, the global economy started to go steadily at present. In the current global financial crisis, the Brazil, Russia, India and China ( "BRIC") will become the highlight to drive the global economy to recover and make great contribution for the global economy to go out from the slump. Though the foreign trade situation of small and medium-size textile companies remains severe, foreign trade confidence index doesn't appear to decline, so companies should grasp this opportunity, emphasize on market survey and transfer the mode for foreign trade growing, timely upgrade production technology and equipment, and adjust export structure so as to welcome new opportunities after the crisis. Keeping growing is the current task, restructuring is the long-term task. The textile industry can develop key industries and fashion cultural innovative industries by adopting high and new technology. From this point, Shaoxing's textile and garment enterprises still can be upgraded largely.
Issuing Unit: the Ministry of Commerce of the People's Republic of China
Construction Unit: China Textile City Construction and Management Committee, "China·Keqiao Textile Index" Construction Office
Chinese Website:http://www.kqindex.gov.cn/
English Website:http://en.kqindex.gov.cn/
Tel: 0575-84125158 Contact Person: Wei Yinan, Ding Jun
Fax: 0575-84125158
