China year-end review 2023: Continued domination

Despite enhanced manifestation of China plus One policy, increased competition and US-China trade war, China continued to dominate the international textile trade.

Investment and currency swap

China’s manufacturing sector continued to attract investors as the country witnessed a significant increase in new foreign-invested companies, with 41,947 established in January-October 2023 period – a 32.1 per cent rise from the previous year. Despite this growth, the foreign direct investment (FDI) in China, in value terms, declined by 9.4 per cent y-o-y, totalling to ¥987.01 billion (approximately $137.6 billion). However, FDI in the manufacturing sector rose by 1.9 per cent to ¥283.44 billion. Investments from Canada, the UK, and France surged dramatically, with respective increases of 110.3 per cent, 94.6 per cent, and 90 per cent.

China’s Central Bank announced in November, the signing of a 3-year bilateral currency swap agreement between the Saudi Central Bank and the People’s Bank of China. The ¥50 billion ($6.98 billion or SAR 26 billion) worth of agreement will help to strengthen the financial cooperation between both sides, expand the use of both the currencies, and promote bilateral trade and investment facilitation.

Trade during the year

For the whole year up to October, the aggregate exports at $249.340 billion of Chinese textiles, yarn, fabric, garments and clothing accessories fell 9 per cent short of exports during the same period in 2022. On the other hand, the import of textiles, yarn, fabric and related products was $9.7 billion during this period.

Source: General Administration of Customs of China

From Q1 to Q2, the aggregate exports grew 16 per cent and from Q2 to Q3 the growth was 4.1 per cent. However, on same q-to-q comparison, the respective growth rates for exports of textile, yarn and fabrics were 13.3 per cent and (-) 5.1 per cent. In contrast, exports of garments and accessories increased 18.4 per cent and 12.1 per cent. On import side as well, there was a consistent growth with garments and accessories import increasing 22.3 per cent (Q1 to Q2) and 11.3 per cent (Q2 to Q3). 

Comparable trade

Compared to 2022, the exports of textiles, yarn and fabrics declined 12.1 per cent, and garments and clothing accessories dropped 1.3 per cent during Q1 (January to March).

For four-month period (January to April), the aggregate exports reached $92.883 billion (down 2.87 per cent) in which textiles exports declined 8 per cent from $48.717 billion (2022) to $44.808 billion (2023); and, garment and accessories exports increased 2.5 per cent from $46.909 billion (2022) to $48.075 billion (2023).

For January to May, the aggregate exports dropped 5.26 per cent to $118.202 billion inclusive of garment and accessories worth $61.373 billion ($62.052 billion last year) dropping 1.1 per cent, and textiles falling 9.4 per cent from $ 62.719 billion to $56.829 billion. During the five-month period, the imports of textiles, yarn and fabric decreased 21.9 per cent to $4.334 billion ($5.548 billion in 2022).

For January to August, China’s apparel exports to the United States – the world’s top apparel importing nation, fell 29.47 per cent to $10.98 billion, and to Vietnam it decreased 24.57 per cent to $9.06 billion.

In September, textiles exports reached $26.196 billion, falling 6.38 per cent from 2022. The exports were mainly to US ($4.2 billion), Japan ($1.95 billion), Vietnam ($1.57 billion, South Korea ($900 million) and Kyrgyzstan ($776 million). The drop in exports was mainly due to reduced exports to Taiwan (down 32.8 per cent), Nigeria (down 17.3 per cent) and Kazakhstan (down 27.5 per cent).

Cotton price trends

In June 2023, the average cotton yarn import price (CIF) in China stood at $2,612 per ton which was almost similar to May’s price. The pace of growth was the most pronounced in March 2023 when the average import price increased by 7.2 per cent m-o-m. There were significant differences in the average prices amongst the major supplying countries. In June 2023, when the country with the highest price was India at $2,946 per ton, the country with the lowest price was Bangladesh with $1,183 per ton. From June 2022 to June 2023, the most notable rate of growth in terms of prices was attained by Bangladesh (up 1.2 per cent).

During the same month, the average cotton yarn export price (FOB) amounted to $3,953 per ton, reducing by 2.9 per cent against May. Overall, the export price recorded a perceptible contraction. The growth pace was the most rapid in January 2023 when the average export price increased 9.3 per cent m-o-m. In June 2023, the country with the highest average price was Italy ($8,755 per ton), while the average price for exports to Russia ($1,356 per ton) was amongst the lowest. From June 2022 to June 2023, the most notable rate of growth in terms of prices was recorded for supplies to Uzbekistan (up 0.4 per cent), while the prices for the other major destinations experienced a decline.

In November, the Chinese cotton prices, measured by the China Cotton Index (CC 3128B), decreased from 114 to 106 cents per pound, translating into a drop from 18,400 to 17,100 RMB per ton. The Chinese Renminbi (RMB) remained stable against the US dollar, maintaining a rate of approximately 7.29 RMB per USD.

Santoni Shanghai Knitting Machinery Co Ltd received the regulatory approval from Chinese authorities for its proposed acquisition of Terrot GmbH – a leading manufacturer of circular knitting machines in Germany. The acquisition represented a pivotal step in Santoni’s strategy to advance the circular knitting machine industry. The integration of Terrot into the Santoni ecosystem is projected to increase Santoni’s production capacity and boost its market share. It is also expected to solidify Santoni’s position as the leading manufacturer in the industry, with unrivalled scale, depth of innovation, and expertise.

ITMA Asia + CITME returned to Shanghai

ITMA Asia+CITME returned to Shanghai with full opening of Chinese markets. The 2022 edition, rescheduled to 19th to 23rd November, was an important event for Chinese operators who are getting increasingly sensitive to quality, innovation and the ability to bring together cost savings with product sustainability. The event reflected positive vibes for the Chinese market despite demand for foreign machinery from local textile manufacturers slowing down somewhat during the first half of the year. Due to continued investments in the textile industry, China showed no shortage of opportunities. The demand for textile machinery in China is centred mainly on technologies that are capable of combining savings in production costs with solutions aimed at respecting the environment. To increase its competitiveness at global level, China’s textile manufacturers – just like those of other countries – are focusing on the digitalisation of production processes, as well as on sustainable technology solutions.

Keqiao event

In November, the International Textile Manufacturers Federation (ITMF) 2023 Annual Conference and the 6^th World Textile Merchandising Conference themed on “Investing in a Greener and Circular Textile Industry” were also jointly held for the first time, in Keqiao, Shaoxing, Zhejiang Province, located in eastern China. The conference attracted nearly 1,000 participants from almost 60 countries and regions. The two international events were organised together to establish an open and cooperative, mutually beneficial, and win-win global textile supply chain system.

The World Textile Merchandising Conference consisted of a theme forum and 10 parallel forums. The parallel forums included a conference on the ‘Belt and Road Initiative’ – a round table forum of famous enterprises, a summit on textile digital inkjet printing, and a forum on the textile industry’s green development. Various topics pertaining to global textile industry such as the empowerment of digital technology, the development of smart manufacturing, fashion brand strategies, environmental and social governance (ESG), material recycling, and innovation of intangible cultural heritage, were discussed. During the event, the ITMF and the China National Textile and Apparel Council introduced the exploration and achievements of China’s textile industry in recent years. In addition, the “Keqiao District to Build a Modern ‘International Textile Capital’ Action Plan” was introduced at the conference. Keqiao, Shaoxing is one of the most prominent textile industrial clusters in China which offers the widest range of textile products. The conference also launched the China Textile City “Silk Road from Keqiao: Fabrics Connect the World” overseas public platform, which will further accelerate the pace of Keqiao’s opening to the world.

ALCHEMPro News Desk (WE SB)