Since 2020, the spread of COVID-19 has caused the global economy to slump. According to the World Bank’s prediction in June 2020, the global economy will decline by 5.2% year-on-year in 2020. At the same time, global trade activities have also suffered severely, and it is expected that global trade volume will decline by 13.4% year-on-year in 2020. From a domestic perspective, economic activity is still under pressure, but it has significantly eased from the first quarter, industrial production has slowed down, fixed asset investment has narrowed, and domestic consumption has gradually increased.

At present, in the face of a complex and severe domestic and international environment, China’s textile industry is still under great operating pressure. Most of the textile industry chain still has continuous slowdowns in supply and demand, contraction of corporate investment activities, and decline in industry efficiency. The industrial textile industry is affected by factors such as the urgent need for anti-pandemic materials, and the economic benefits of related companies have improved significantly, showing a rapid growth.

In the long run, my country’s pandemic prevention and control situation will be further consolidated, the resilience of my country’s economic development will continue to increase, and some of the consumer demand that was suppressed in the early stage will continue to be released. These positive factors will support my country’s textile industry to gradually return to stability.

 

According to data from the National Bureau of Statistics, from January to April 2020, the industrial added value of textile enterprises above designated size fell by 11.3% year-on-year, and the decline was narrowed by 5.2 percentage points from January to March. In all links of the industrial chain, the added value of the industrial textile industry increased significantly, up 33.8% year-on-year, an increase of 22.3 percentage points from January to March, and the remaining industries all showed a different decline.

Compared with the same period of previous years, the output of various textile key product categories showed a significant decrease, and only the production of nonwovens maintained a small increase. According to statistics, from January to April 2020, the output of nonwovens of domestic enterprises above designated size was 15.60 billion meters, an increase of 2.3% year-on-year. Among them, Zhejiang, Fujian, Shandong, Jiangsu, and Guangdong are the top five nonwovens production provinces, with a total production of 9.87 billion meters, accounting for 63.3% of the national output.

 

Affected by the impact of the pandemic, the consumption elasticity of the apparel category as an optional consumer product is greater. In the overall decline in consumer demand, the decline in apparel commodity consumption is more obvious. According to data from the National Bureau of Statistics, from January to April 2020, the total retail sales of consumer goods in the country amounted to 10,675.8 billion yuan, down 16.2% year-on-year. Among them, the retail sales of clothing, shoes and hats, and knitwear products above designated size reached 305.7 billion yuan, a year-on-year decrease of 29.0%, the proportion of retail sales of social consumer goods decreased from 3.44% in the same period last year to 2.86%.

In the current consumer environment, online retail is gradually recovering. From January to April 2020, my country’s retail sales of online wearing goods decreased by 12.0% year-on-year, the decline was narrowed by 2.9 percentage points from January to March. From the point of view of key categories, women’s clothing and home textile products resumed quickly. According to relevant data on the Taobao platform, in March 2020, the sales growth rate of women’s clothing and home textile products on the Alibaba platform were 3.5% and 10.8% respectively. By April 2020, the growth rate will increase to 47.5% and 34.4%, respectively. Men’s clothing products are also in the recovery stage.

 

Affected by the pandemic, the apparel consumption demand of key global markets has declined significantly, but the surge in import demand for related pandemic prevention materials has also caused my country’s textile and apparel exports to show an obvious “textile increase and apparel decline” export characteristics since this year. According to the Customs Express data, from January to May 2020, my country’s textile and apparel exports were USD 96.16 billion, down 1.2% year-on-year, and the decline was narrowed by 8.8 percentage points from January to April. Among them, textile exports were USD 57.95 billion, up 21.3% year-on-year; apparel exports were USD 38.21 billion, down 22.8% year-on-year.

Among the key categories of textile export growth, masks have become an important export support. According to statistics from my country’s customs data, from January to April, the amount of masks accounted for 33.0%, 40.0%, and 54.0% of my country’s textile exports to the United States, Japan, and the European Union.

 

Since the beginning of this year, due to the impact of the pandemic and the multiple factors such as periodic adjustment of the industry, the industry’s overall investment willingness is not strong, showing a trend of shrinking investment scale. According to data from the National Bureau of Statistics, from January to April 2020, my country’s textile industry fixed investment fell by 33.9% year-on-year, the decline was narrowed by 4.1 percentage points from January to March. Among them, the fixed investment in the textile industry decreased by 32.5% year-on-year, the fixed investment in the apparel industry decreased by 41.7%, and the fixed investment in the chemical fiber manufacturing industry decreased by 16.2% year-on-year.

From the perspective of major provinces, driven by investment in pandemic prevention-related projects, only the three provinces of Yunnan, Shaanxi, and Gansu have achieved positive growth in investment in the textile, chemical fiber, and apparel industries, while the investment willingness of the remaining provinces and regions is relatively low.

 

The pressure on the decline in the efficiency of the textile industry is greater. According to data from the National Bureau of Statistics, from January to April 2020, the national textile enterprises above designated size achieved operating income of 1,194.25 billion yuan, a year-on-year decrease of 19.7%; the total profit was 37.70 billion yuan, a year-on-year decrease of 32.1%; the operating profit margin of the enterprise was 3.2%, down 0.6 percentage points year-on-year.

From the perspective of all links in the textile industry chain, the operational quality and efficiency indicators of the industrial textile industry have improved significantly. According to estimates, from January to April 2020, the operating profit margin of the industrial textile industry was 9.3%, an increase of 4.8 percentage points year-on-year; the three expenses ratio was 8.0%, a decrease of 0.2 percentage points year-on-year; asset-liability ratio was 49.2%, a decrease of 1.0 percentage point year-on-year; the asset turnover rate was 1.2 times/year, the highest among all textile sub-industries.

 

Global economic and trade activities are likely to decline in 2020. In order to respond to the threat of COVID-19 worldwide, the health care system has been strengthened, and some economic activities have to be suspended. The World Bank and OECD have made judgments on the sharp decline of the global economy in 2020. At the same time, the OECD judges that the global unemployment rate will rise sharply to 10.0% in 2020. The global trade market is shrinking, and the export trade market of my country’s textile industry will be under pressure simultaneously.

However, we should also see that the current domestic pandemic prevention and control situation continues to improve, and we will fully promote the resumption of production in the entire industry chain, reduce the burden on enterprises, and expand the domestic consumer market. According to relevant data from the Ministry of Industry and Information Technology, as of May 18, 2020, the average start-up rate and the stuff getting back to work rate in industrial enterprises above designated size reached 99.1% and 95.4%, respectively, basically reaching normal levels. With the implementation and promotion of relevant policies such as domestic fee reductions and tax cuts, stimulating consumption, expanding infrastructure investment, stabilizing employment and protecting people’s livelihood, the domestic market’s consumption support role will gradually recover, and the quality of the textile industry’s operation in the second half of the year may be improved.

(Source: China Textile Economic Research Center)