With Medical Gear as Lifeline, Export Textile Industry Faces Uncertain Future
China’s export garment industry has withered as people around the world remain indoors and shun department stores to avoid catching Covid-19.
The textile producers that underpin it have found a lifeline in massive demand for medical gear to fight the virus. But the boon won’t last, industry insiders say.
In the first five months of 2020, the value of China’s garment exports dropped 20.3% year on year to 267.81 billion yuan ($37.9 billion). A recovery looks far off.
“It will be difficult for international apparel demand to recover (to pre-virus levels) in the short term,” said Duan Tao, general manager of China Textile International Clothing Co. Ltd., a major supplier to Walmart Inc. that exports around 70% of its products. Orders from retailers and department stores are plunging or being cancelled outright, and payment risks in Asian and African markets are rising, Duan said.
Counterintuitively, Chinese customs data show textile exports are up 25.5% year-on-year for the first five months to 406.6 billion yuan. They’ve been propped up by demand for medical goods like face masks and protective gear, after the sector shifted production to such products as the coronavirus epidemic accelerated.
In May alone, China’s textile exports were worth 145 billion yuan, up almost 80% year on year.
Facemasks alone made up half of China’s textile exports to Europe and about one-third to the U.S. in the first four months of 2020, according to China’s General Administration of Customs.
But insiders worry virus-related orders will not sustain the industry, as they do not represent normal demand.
Duan participated in this year’s Canton Import and Export Fair — an annual trade fair that went online this year amid the outbreak — in order to drum up more business. But whether it will help boost sales remains to be seen, he said.
Wang Yu, vice president of a textiles trading association affiliated with China’s Ministry of Commerce, is pinning his hopes on the vast domestic market creating new momentum for garment sales. “The average spend on clothing per person in China is less than $200 last year, that’s a huge gap from an average of about $1,000 in developed countries,” he said.
But Wang conceded that sector’s resumption of business is still rooted in a recovery of international demand.
Contact reporter Lu Yutong (email@example.com) and editor Flynn Murphy (firstname.lastname@example.org)
- MOST POPULAR