Textile companies in China see decline in international orders as COVID19 rages globally

By Chen Shasha Source:Global Times Published: 2020/3/25 22:10:28

A worker is busy at a textile enterprise in Hangzhou, East China's Zhejiang Province. Photo: cnsphotos

 "It will be a tough year for the textile industry," Hu Qinhua, owner of Shaoxing Hongyutong textile company told the Global Times Wednesday. As the COVID-19 pandemic rages overseas, some textile companies in China are suffering a continuing economic loss on foreign trades following the impact of the domestic outbreak.

Hu's company is located in the China Light & Textile Industrial City in Keqiao of East China's Zhejiang Province. As the largest textile distribution center in Asia, the textile city achieved a turnover of 252.689 billion yuan on its online and offline markets in 2019.

But the 2020 prospects are hazy due to the COVID-19 pandemic. According to a recent industry survey, over 78 percent of textile companies in the city feel they are losing orders, and about 65 percent said their customers have canceled orders.

Hu said half of her orders are from overseas customers in European countries and the US, mainly Germany. As the coronavirus infection spikes overseas, her overseas customers either canceled their orders or didn't place new orders, which has hugely impacted her company.

"Some orders from my overseas customers have been produced, but they are now stockpiled in the warehouse," Hu said. "It is hard to evaluate the economic loss currently. We have to wait until the pandemic ends and contact our customers again."

What's worse, domestic supply chain disruptions have continued to test her orders. "Production in dye factories, grey cloth factories have lagged due to the pandemic, which also affected our supplies," she added.

The impact of the outbreak is a chain reaction. Zhou Shuiping, a manager with Shaoxing Baishanchang textile company in Keqiao which produces women's clothing fabrics, told the Global Times some of his garment customers whose products are mainly sold to Japan and South Korea, stopped placing orders since mid-March.

"Usually this is the peak season and we deliver lots of goods every day, but this year there are only a few orders," Zhou said, adding that he has lost more than half of the orders year-on-year.

Foreign trade in China's textile industry started to see decline before the coronavirus surged overseas. According to customs statistics, China's export of textile yarns, fabrics, and products in January and February reached $13.77 billion, down 19.9 percent year-on-year.

Exports of clothing and related accessories reached $16.06 billion, down 20 percent year-on-year.

The demands from overseas markets continue to shrink as overseas companies and factories, and even national borders are being closed in a bid to contain coronavirus. Textile companies in China are seeking a change.

"We are stepping up development on new products for summer outfits to explore domestic markets," Zhou told Global Times. "Fortunately, domestic markets are moving, we are receiving orders for March and April now."

Hu's company mainly produces medium and high-end uniform fabrics, such as public security uniforms, military uniforms, business suits, and women's wear. Now she is considering exploring the domestic fabric market of children's cloth. 

China is a major exporter of clothing and textile. 60 percent of the world's clothing materials are produced in China, and 20 percent of the international trade of semi-finished goods such as spinning thread, cloth, and zipper buttons is related to China, according to reports.

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