In the past 15 years, with the growth of GDP and the decline of FOB prices, global clothing imports have changed. Will this trend of change continue in the future?
It is reported that when we mention clothing imports, we always think of the United States and the European Union first, followed by other countries. This is an objective fact, but judging from the development and changes in the past 15 years, the situation is changing.
In 2000, the United States and the European Union accounted for 54% of global clothing imports. If intra-EU trade is also included, the figure was as high as 76%. In 2000, clothing imports from high to low were the European Union, the United States, Japan and Canada. These four countries together accounted for 66% of the world’s total.
However, by 2013, according to WTO data: the proportion of clothing in the United States and the European Union dropped from 54% to 40%, and the sum of the above four countries also dropped from 66% to 50%.
Obviously, the main reason is the GDP growth of other countries. For example: From 2000 to 2013, Russia’s clothing imports grew from almost zero to $9 billion per year, an increase of nearly 2,000%. During the same period, South Korea’s clothing imports increased by 148%, the United Arab Emirates by 102%, and China by 92%.
However, the U.S. market share fell from 34% to 20% during the same period. This is not because of the growth of domestic clothing production in the United States, but because over the past two decades, 98% of the clothing sold by American clothing retailers has relied on imports, while domestic production has declined significantly.
The reason is that FOB prices have fallen. From 2000 to 2013, the average FOB price per square meter fell from US$3.57 to US$3.21, and this downward trend has remained constant. Until March 2015, the average FOB price was US$3.12, a decrease of 12.5% compared with 2000.
FOB price: Although FOB price has been declining, it will not continue forever because the reasons causing the price will not continue.
1. Recession: The economic crisis in 2008 led to a decline in FOB prices, but the economy will recover in the future, and as demand grows, FOB will rise.
2. China: China’s clothing production efficiency is high, and China occupies a major position in the global clothing market. This not only makes the cost of clothing made in China low, but also encourages factories to produce in other countries to seek lower costs to compete with China. However, once the optimal balance between cost and output is reached, it is unrealistic to blindly maintain low costs and high productivity.
3. Seek lower-priced clothing: Cheap materials require less manual sewing, which also makes FOB prices drop. However, today’s consumers are less willing to buy low value-added clothing, even if its retail price is low.
4. Clothing imports: Although the rise in GDP will increase imports, the clothing industry is diversified.
Clothing exports are not only ubiquitous, but also the first step in economic development. In developing countries, clothing production is common and there is a desire to reduce imports and protect exports. So the clothing industry is the most protected in the world. In addition to the above policy protection, GDP growth has a smaller impact on the increase in clothing imports.
Under the current system of maintaining free trade, clothing importing countries impose higher tariffs on a few countries, forming trade barriers and safeguarding vested interests. Some developing countries require developed industrial countries to implement zero tariffs on their clothing exports. Some importing countries regard tariff-free agreements as an advantage as strategic partners. The EU provides trade facilitation to countries with democratic governments and good human rights records, while the United States provides trade preferences to strategic partners in the Middle East or neighbors in the Western Hemisphere.
No one is in favor of a global free trade agreement for the apparel trade because, as the system currently operates, such an agreement would undermine social and political advantages.
It is clear that the EU is more generous in allowing zero-tariff imports than the United States. Paradoxically, 50% of the clothing in the EU market is produced locally, while only 2% is produced domestically in the US market.
In fact, in order to stimulate consumption, China has fewer and fewer restrictions on clothing imports, which has a positive effect on the development of global clothing trade. The Trans-Pacific Partnership will also enhance trade within the system’s countries. The only exception is the United States, which is no longer able to increase its share of global apparel imports.
According to the latest data, as of 2011, offshore prices, especially in the United States, have begun to stabilize—the main reason is China. Apart from China, we don’t see apparel imports growing in other developing countries. Based on the above, it is still unclear how the clothing trade will change in the future. But what is certain is that when it comes to global apparel trade, China’s influence is huge.
Changes in global apparel trade: China still plays a vital role
In the past 15 years, with the growth of GDP and the decline of FOB prices, global clothing imports have changed. Will this trend of change continue in the future? It is reported that when we mention clothing i…
This article is from the Internet, does not represent Composite Fabric,bonded Fabric,Lamination Fabric position, reproduced please specify the source.https://www.yjtextile.com/archives/11060