Although China’s garment export market share continues to decline, no country can currently replace its position.
China is also playing its key role as a textile supplier that can integrate Asian supply chains.
If Vietnam can maintain the growth momentum of textile exports, it may qualify to become the world’s seventh or even sixth largest textile exporter in 2019 or 2020.
As the purchasing power of consumers in emerging economies continues to increase, these markets will become increasingly important importers of garments.
Since 2012, the global textile and garment trade reached the fastest growth rate in 2018. The key trends worthy of attention are the continued strength of Vietnam’s textile exports, China’s role as Asia’s leading fabric supplier, and the changing world order in the garment consumer market. Dr. Shengs Lu, associate professor in the Department of Fashion and Apparel Studies at the University of Delaware, made the following analysis.
According to the latest “World Trade Statistical Review 2019” of the World Trade Organization (WTO), the export value of global textiles (SITC65) and ready-made clothing (SITC84) Reaching US$315 billion and US$505 billion respectively in 2018, an increase of 6.4% and 11.1% compared with 2017, which is the fastest growth rate in 6 years.
[Explanation: 1. Standard International Trade Classification SITC); 2. SITC65-TextileYarnFabricsMade-upArticlesN.E.S.&RelatedProducts refers to “Standard International Trade Classification No. 65 (Class)” Gauze, finished textile products and unlisted textile-related products”; 3. “International Trade Standard Classification No. 84 (Category) Ready-made garments and apparel articles” referred to in SITC84-Articles of Apparel & Clothing]
At the same time, driven by rising energy prices, world merchandise exports also increased by 10% in 2018, reaching US$19.67 trillion. However, world merchandise trade volume only grew by 3.0%, and world gross domestic product (GDP) grew only slightly higher by 2.9% compared with the same period. This means that the global trade growth rate to the GDP growth rate fell to 1.0 again in 2018, which is lower than the historical average of 1.5.
Textiles and garments accounted for about 4.2% of global export value in 2018, down from 5% in 2016.
●Major textile and garment exporting countries
Table 1: Top 10 global textile exporters in 2018 Country (by value)
Data source: World Trade Organization (2019)
As shown in Table 1, in 2018, China and the European Union ( 28 countries) and India are still the top three textile exporters in the world. The total textile export value of the three countries accounted for 66.9% of the global textile export value in 2018, a new high since 2011. The export growth rates of China and the European Union (28 countries) are also higher than the world average, with growth rates of 7.9% and 6.9% respectively.
The United States remained the world’s fourth largest textile exporter in 2018, accounting for 4.4% of its global textile exports, slightly lower than 4.6% in 2017.
Vietnam has become the world’s eighth largest textile exporter for the first time in history, growing by 12.5% compared to the same period last year, reaching US$8.3 billion. If Vietnam can maintain this growth momentum, it is likely to surpass Taiwan and South Korea in the future and become the world’s 7th or even 6th largest textile exporter in 2019 or 2020.
Table 2: Top 10 global garment exporters in 2018 (by value)
Data source: World Trade Organization (2019)
As for the garment sector, according to (Table 2), China, the 28 EU countries, Bangladesh, and Vietnam were still among the top four exporters in the world in 2018, accounting for the world’s Ready-made clothing market share is 72.3%. That said, this is down from 75.8% in 2017 and 74.3% in 2016, mainly due to a decline in market share in China.
Although the garment exports of Vietnam (13.4% growth) and Bangladesh (11.1% growth) enjoy absolute growth rates, their market share in global exports has increased very little. Less, Vietnam increased from 5.9% to 6.2%, an increase of only 0.3 percentage points, and Bangladesh increased from 6.4% to 6.5%, an increase of 0.1 percentage points.
This once again shows that due to production capacity constraints, no country can qualify and become the “next China.” On the contrary, China has lost market share in ready-made garment exports and has been replaced by some countries with low labor costs. This phenomenon can be linked to the diversified sourcing strategies of fashion brands and retailers.
Specifically, for China, the country is continuing the trend of reducing exports of ready-made garments and increasing exports of textiles to global markets in recent years. It is worth noting that China’s market share of global garment exports dropped from a peak of 38.8% in 2014 to a record low of 31.3% in 2018.
As pointed out in the “2019 US Fashion Industry Benchmarking Study” (2019 US Fashion Industry Benchmarking Study) released by the United States Fashion Industry Association (USFIA) in July 2019, the United States and China Escalating tariff war accelerates U.S. companies’ shift to purchasing from Chinapurchase. However, this trend started many years ago.
At the same time, China accounted for 37.6% of global textile exports in 2018, a record high. It is worth noting that for many Asian garment exporting countries, China is currently playing a key role as a textile supplier with increasing importance. In value terms, China’s textile exports to East and Southeast Asian countries reached 53.8% and 60.6% respectively in 2018, much higher than only 33.4% and 33.7% in 2005.
We can observe similar patterns at the country level during the same period, such as Cambodia (from 30% to 65%), Vietnam (from 26% to 52%), Pakistan (from 32% to 71%), Malaysia (from 27% to 54%), Indonesia (from 32% to 49%), Philippines (from 20% to 46%), Sri Lanka (from 15%) to 39%).
In addition, the Association of Southeast Asian Nations (ASEAN) and the other ten member states (including China, Japan, India, South Korea, Australia, and New Zealand) are in the process of The final stages of negotiations for a “mega-free trade deal” also known as the Regional Comprehensive Economic Partnership (RCEP).
Data show that as of 2018, about 51.0% of the imported textiles of RCEP member countries were supplied by China. Once the trade agreement comes into effect, China is expected to play a key role as a major textile supplier for RCEP members in the next one or two years, helping to more integrate the regional supply chain of Asian textiles and garments.
●Major textile and garment importing countries
Table 3: Top 10 textile importers in the world in 2018 Country (by value)
Data source: World Trade Organization (2019)
As shown in (Table 3), calculated by value, In 2018, the European Union (28 countries), the United States, and China ranked among the top three textile importers in the world, accounting for 37.5% of the total global import value. Although its market share is close to 37.7% of the previous year, it is still far lower than more than 50% in 2000.
The increasing diversification of textile imports is closely related to changes in global garment manufacturing and export models. It is worth noting that in the past decade, garment production has undergone substantial changes, shifting from developed to developing countries.
At the same time, due to the lack of local manufacturing capabilities, most developing countries rely heavily on imported textiles. This explains why these developing countries that are committed to exporting garments have a constant demand for textile imports. Because of the increase, such as Bangladesh (17% growth), Vietnam (9.8% growth), and Indonesia (21% growth), their growth rates are particularly fast.
Table 4: Top 10 global garment importing countries in 2018 (by value)
Data source: World Trade Organization (2019)
As shown in (Table 4), due to consumer purchasing power (usually calculated in terms of per capita GDP) and population size, the European Union, the United States, and Japan were still the top three in the world in 2018 Large garment importing country. Combined, the import value of these three countries in 2018 accounted for 61.5% of the total global garment imports, which was still lower than 62.3% in 2017 and a large decrease compared with 84% in 2005.
Behind this result is not the reduction of clothing imports by the European Union, the United States, and Japan. On the contrary, some emerging economies are becoming fast-growing consumer markets for ready-made garments and are beginning to import more ready-made garments.
For example, China’s total garment imports in 2018 reached US$8.3 billion, a double-digit growth (13.7%) compared with the same period in 2017. From 2010 to 2018, the annual growth rate of China’s garment imports was close to 16%, compared with the annual growth rate of only 1.8% for the traditional top three importing countries.
As the purchasing power of consumers in these emerging economies continues to increase, we can expect the global garment import market to become more diversified in the coming years.
