As Southeast Asian countries relax their epidemic prevention and control measures and speed up the resumption of work and production, the impact will soon be felt in foreign trade. Only in the textile and garment industry, some of China's textile and garment enterprises observed that foreign trade orders flow to Southeast Asia, but because the loss is mostly low-end processing orders, it can bear.


"The company's foreign trade market this year is better than last year. Although the earlier part of the year was bad, many orders have come in since the devaluation of the yuan. Also, raw materials are not as expensive as in previous years, so the cost of raw materials has little impact on the market." Ouyang Hong, general manager of Suzhou Jingzhi Textile Technology Co., LTD., told China Trade News, "I have also seen some orders flowing to Southeast Asia. Most of the textile orders transferred to Southeast Asia are processing orders. The textile industry has a long industrial chain, and some links are complicated. Southeast Asian countries are unable to undertake it completely. But we have also noticed that Southeast Asian countries have a certain industrial foundation and accumulation in the garment industry, and can grab a lot of orders in the garment trade."

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Ouyang Hong also revealed that a foreign buyer asked him to purchase textile fabrics, different from the previous textile fabrics to a processing site in China, but let him send the textile fabrics directly to Vietnam, is obviously to process clothing in Vietnam. But OuYangHong companies don't transfer to Vietnam production, because the company's textile business involves a lot of ingredients, need the necessary support, domestic related industry chain is more complete, and Vietnam can only finish part of links of processing, if transfer the past also need to spend a lot of effort and cost to find manufacturers, not too convenient not cost-effective.


Zhejiang yiheng knitting Co., LTD., general manager Han Yangling said that the company produces more varieties of socks, color variety, the market pricing is also higher, at present, the transfer to Southeast Asia orders are mostly low-end socks products, temporarily the company is not affected.


Zhang Xiaofeng, deputy secretary general of Zhejiang Garment Industry Association, told reporters that textile and garment orders to southeast Asia does exist, Vietnam's textile and garment export growth this year, data shows that many orders are transferred by domestic enterprises, including a considerable number of Zhejiang enterprises. He introduced that Southeast Asian countries have low labor costs and can avoid some trade barriers. Although Vietnam and Thailand lag behind China in overall economic development, their textile and clothing industries and food industries are very prosperous and have a good industrial foundation. They can undertake industrial transfer, but the high-end industries such as machinery and electronics cannot.


Li Shunhong, a lecturer at the Department of Foreign Trade, School of Economics, Yunnan University, analyzed that there has always been a phenomenon of textile and garment industry moving to Southeast Asia, involving demographic dividend and other factors. The current textile and garment trade orders flow to Southeast Asia, which is related to Vietnam and other countries vigorously promoting the resumption of work and production, although the epidemic situation in Vietnam has not improved.

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How do Chinese enterprises respond to this? In view of the labor cost, Ouyang Hong's company has communicated with the machine manufacturer and tried to continue to upgrade the equipment, so as to reduce the use of labor. For example, the product packaging used to be manual packaging, and the cost of one packaging employee is 7,000 yuan per month, but now it is changed to automatic packaging, which is more efficient. Loading products before workers shoulder, the operation is slow, now also realize automatic loading.


Zhang Xiaofeng believes that Chinese enterprises have made a choice to transfer part of their production capacity to Southeast Asia based on market conditions. From the perspective of domestic industry development, high-quality development is the only way out, and a good business environment should be created at the same time.


Specifically, Zhang Xiaofeng analyzed that the company's operation involves two large costs -- wages and rent. Currently, the domestic wage cost cannot be reduced. The monthly salary of front-line workers in Zhejiang is 7,000 to 8,000 yuan. The cost of raw materials is greatly affected by the international market and cannot be changed for the time being. What enterprises can do is to change themselves and improve the added value and quality of products. Textile enterprises should comprehensively improve fabrics, styles and brands.


"Of course, we should also recognize that it takes a process to improve the quality and international brand awareness. When China's textile and garment enterprises make good brands, their product profits and added value will be higher, and they will be better able to cope with pressure such as rising costs and shifting orders." Zhang xiaofeng said.