Stagnant textile trade

The 2001 global textile product trade was affected by business slumps in advanced countries and the September 11 terrorist attacks. Although each country expects a recovery this year, the business environment is still severe.

Poor Exports

Asian textile product exports in 2001 were clearly influenced by European and American business slumps and the September 11 terrorist attacks generated in the U.S. Exports from the major Asian countries turned around and shrank from the favorable results registered in 2000. They stopped sharp growth or even started to decrease. Although Chinese textile product exports continued a rapid growth, it did not escape from the influence. Each country expects a recovery this year, but the business environment is still severe.

U.S. Imports Level Off

The U.S. has had a great influence on global textile and apparel industries as the greatest importing country for textile products.

According to the U.S. Department of Commerce, textile and apparel imports decreased by 0.2% in 2001 to 32,807.5 million SME (square meter equivalent) compared with the previous year. The import value decreased by 2% to US$70,239.6 million. It can be said that they maintained mostly about the same import record as the previous year.

However, the import volume of textiles and apparel dropped suddenly after the terrorist attacks on September 11, 2001. The U.S. economy started to slow down in the second half of 2000. It went into a recession in March 2001, and also received damage by terrorist attacks in September. That big shock intensified the whole business slump. New business talks and new shipments stagnated after the terrorist attacks. The influences are likely to appear in foreign trade statistics this year.

Apparel imports increased by 0.4% to 16,103.6 million SME among textile and apparel imports of the U.S. in 2001. Textiles were 16,703.9 SME and decreased by 1%.

Changes by textile item were as follows: Yam remarkably decreased by no less than 14.3% to 2,928.0 million SME. Fabrics were 6,983.7 million SME and decreased by 0.3%. To these, made-ups and others increased by 6% to 6,792.2 million SME.

By source, textile and apparel imports from the Big Four of East Asia totaled 5,911.0 million SME, and were leveling off from the previous year. Imports from Korea continued an increasing pace exceeding the previous year by about 8% until August 2001. However, the annual imports from Korea were 1,383.5 million SME. Its annual growth rate slowed to 5.5%. Imports from China were various by the month. They were not especially offered by the September 11 terrorist attacks. Annual imports from China were 2,210.8 million SME, and settled at the same level as in 2000.

Regarding the North America Free Trade Agreement (NAFTA) countries, imports from Canada increased by 2.0% to 3,267 million SME. Imports from Mexico were 4,290.3 million SME. In contrast with Canada, imports from Mexico decreased by 9.6%. Both cotton and synthetic fiber products were in a bad condition.

Imports from Caribbean Basin Initiative (CBI) countries also decreased by 6% against each previous month for two consecutive months, in November and December. Especially, imports from the Dominican Republic decreased by 10%. Among the imports from the Dominican Republic, imports of cotton apparel decreased by about 20%. The imports from Honduras also decreased by 1%.

Imports from the Association of Southeast Asian Nations (ASEAN) were 4,389.8 million SME, and increased by 4%. Indonesia played the role of a leader. Imports from Indonesia increased by 10.6% to 1,164.7 million SME. Imports from Thailand and the Philippines were stagnant. However, new contracts and shipments from Indonesia have been greatly influenced by the September 11 terrorist attacks.

Imports from Pakistan increased by 3.3%, Israel by 9% and Bangladesh by 9.6%, respectively. Having received order adjustments after the September 11 terrorist attacks, imports from Pakistan stalled late in 2001.

Chinese Experts Slightly Up 2.3%

Among a severe international competition, China has been called a "sole winner." Chinese exports also failed at exceeding the 2000 figures substantially in 2001.

According to China Customs statistics, China's textile product exports in 2001 were US$53,280 million. They recorded historic high, but achieved only a slight increase of 2.3% from the previous years. Under the influence of depressed European and American economies as well as the September 11 terrorist attacks in the U.S., textile product exports from Asian countries decreased in general. It might be said that China recorded good results compared with others.

However, the China State Economic and Trade Commission aims at expanding textile product exports to US$70-75 billion in the last fiscal year of the 10th Five-Year Plan (2001-2005). The year 2001 was the start of this 10th Five-Year Plan. Compared with the grand export expansion plan, exports in the first year were dull.

Exports by major destination were as follows: Japan, US$13,721 million (up 3.3%); Hong Kong, US$10,675 million (down 6.7%); the EU, US$5,187 million (up 3.9%); the U.S., US$6,126 million (up 1.8%); and Korea, US$2,653 million (up 17.4%). Apparel was the main item for Japan but made only a small increase. Hong Kong was recovered in the second half of 2001 from a sharp reduction in the first half. The remarkable increase for Korea is based on the increase in apparel exports.

China's total apparel exports slightly increased by only 0.7% to US$30,150 million in 2001. Among these, exports of knitted apparel were US$12,397 million (down 0.5%), and woven apparel US$17,753 million (up 1.6%). This stagnation of apparel exports was the largest factor with dull textile product exports by China in 2001.

In contrast, textile exports increased by 4.3% to US$16,842.0 million. Except for spun rayon yarn, spun yarn exports were especially good. In the fabric section, synthetic filament woven fabrics were favorable. Exports of both cotton and wool woven fabrics also increased. In contrast, exports of spun synthetic fiber, linen & ramie, and spun rayon and silk woven fabrics decreased.

Synthetic filament woven fabric exports increased to US$1,314.8 million (up 31%) in value and 1,908.9 million meters (up 25%) in quantity. A rapid growth of these Chinese-made synthetic filament woven fabrics is a big threat for competitors such as Indonesianmade fabrics. The EU was the largest export destination for Chinese-made synthetic filament woven fabrics. Exports for the EU rapidly increased to US$287.2 million (up 54%) and 297.2 million meters (up 48%). This great expansion of exports for the EU led the whole increase in exports of synthetic filament woven fabrics. The main destinations were as follows: Italy, 86.6 million meters (up 41%); Germany, 44.7 million meters (up 69%); France, 41.2 million meters (up 46%); the U.K., 39.0 million meters (up 48%) and Spain, 31.0 million meters (up 44%).

Both the exports to Hong Kong and Korea decreased sharply. Exports to Hong Kong decreased by 24% to 245.8 million meters. Exports to Korea also decreased by 20% to 96.1 million meters. All other main export destinations were expanded.

Chinese textile product imports decreased by 2% to US$13,720 million. This reflected a slow increase in exports and a sharp increase in domestic production. In the man-made staple fiber section, polyester staple fiber imports sharply decreased by 25.8% to 524,006 tons from the previous years. In contrast, imports of acrylic staple fiber increased by 6.0% to 374,434 tons, and rayon staple fiber increased by 4.9% to 48,631 tons. In the man-made filament yarn section, polyester filament yarn imports rapidly decreased by 29.8% to 290,266 tons. On the contrary, nylon filament yarn imports increased by 10.5% to 156,371 tons.

China has given priority to domestic production of polyester fiber. These import statistics have expressed the progress situation of man-made fiber production by item. Fabric imports decreased allaround.

In 2002, the second year of the 10th Five-Year Plan, the China State Economic and Trade Commission plans to increase textile product exports from last years' US$53.4 billion to US$55 billion as well as to expand man-made fiber production from 8,280,000 tons to 8,800,000 tons; spun yarn production rose from 6,700,000 tons to 7 million tons.

China shows an intention to enter global markets further this year taking advantage of its new entry into the World Trade Organization (WTO). Among exports, Western and Japanese markets occupy about 60% of Chinese textile product exports including indirect exports. However, business in these markets is not expected to change quickly China is cultivating new markets such as Russia, East Europe and Africa.

Taiwanese Exports Decrease Sharply

Textile product exports from Taiwan were at US$12.63 billion2001, and decreased no less than 17% compared with the previous year. Under the influence of the September 11 terrorist attacks in the U.S., Taiwanese textile product exports in September fell to a US$0.8 billion level. Exports temporarily recovered to US$1.25 billion in October. However, exports in November and December fell to around US$0.92 billion, respectively. Accordingly, annual exports could not reach even the US$13 billion of the revised targets.

In comparison with 2000, exports of woven fabrics fell greatly. Exports of both woven and knitted fabrics to China (via Hong Kong) fell remarkably. In addition to a self-efficient policy, China is improving the quality of fabrics. Apparel manufacturers, which advanced to China, reduced fabric imports from Taiwan, and shifted into Chinese-made fabrics.

As for fabric exports from Taiwan, not only those for China but also those for ASEAN countries fell greatly. This is because apparel exports for Europe and the U.S. from these countries fell. Furthermore, lowering of the unit prices was also large. The main fabric export from Taiwan is polyester filament woven fabrics. By the offensive of Chinese-made fabrics, the rate of the price fall for polyester filament woven fabrics was large. Apparel exports were not able to oppose the low price offensive of competing countries as well. In the critically important exports for the U.S., Taiwanese apparel exports decreased by no less than 22%.

Textile product imports were US$2.36 billion and decreased by 19% compared with 2000. From inactivation of fabric exports, imports of staple fiber including cotton as well as yarn including cotton yarn fell greatly. Since the imports in December fell, the annual apparel import value decreased by 5%. However, apparel import quantity increased by 3%.

Hong Kong Exports Also Retreat

Hong Kong's apparel exports including accessories decreased in 2001 by 3% to HK$182.8 billion from the previous years. Textile exports also decreased by 9% to HK$95.2 billion.

Among the apparel exports, exports for the U.S. were steady at HK$65.1 billion. However, exports for the EU decreased by no less than 10% to HK$46.1 billion. Among textile exports, exports for China decreased by 7% to HK$65.0 billion, and for the U.S. decreased by 11% to HK$3.7 billion.

Apparel imports increased by 1% to HK$125.5 billion. However, textile imports decreased by no less than 11% to HK$95.0 billion.

Japanese Imports Become Calm

Textile product imports into Japan increased by 8.9% to 2,990 billion yen in 2001. On a U.S. dollar basis, they decreased by 3.4% to US$24,622 million. On a yen basis, yarn imports increased by 6.5% to 112,968 million yen. Cotton yarn occupied about 35% of all imports in quantity. Although imports of cotton yarn decreased in quantity, they increased by 3.8% in value by the weak yen. In addition, manmade filament yarn and wool yarn exceeded the previous year.

Among fabrics, both man-made filament and cotton woven fabrics leveled off. Imports of wool woven fabrics increased by no less than 17.8%.

Apparel imports increased by 9%. Knitted apparel increased by 5.5%, woven apparel increased by 12.7% and woven underwear increased by 6.9%.

Textile product exports by Japan decreased by 11% to US$7,295.2 million in 2001 from the previous years. In yen terms, exports increased by 1% to 887.7 billion yen.

A decrease by more than 10% on a U.S. dollar basis is based on the following reasons: (1) lower export unit prices caused by fiercer international competition and the weak yen, (2) a slowdown from the influence of the September 11 terrorist attacks in the U.S., (3) the business slump of Germany, and (4) inactivation of overseas processing trade (OPT) from the second half of 2001.

By main market, exports to China were US$2,827 million (down 4%). Although a reduction in woven fabrics for OPT was affected, the share occupied by the whole carried out a 3-percentage points rise, reaching 39%. Exports to each country and area in South & East Asia decreased: Korea (down 7%), Taiwan (down 31%), Hong Kong (down 12%), Vietnam (down 5%), Thailand (down 18%), and Indonesia (down 21%).

Exports to the U.S. decreased to 529.9 million (down 18%), and the EU increased by 17% to US$688.7 million. Of the exports for the Middle East, exports for Saudi Arabia decreased by 3%, and those for the U.A.E. also decreased by 3%. They were, however, relatively favorable in comparison with others.

According to main items (quantity base), acrylic staple fiber exports increased by 7% to 315,020 tons and recovered a 300,000-ton mark for the first time in two years. China played the role of leader. The acrylic staple fiber exports for China increased to 168,707 tons, and exceeded 152,475 tons recorded in 1998, which had been the highest ever.

Polyester filament woven fabric exports were 630 million sq. meters, down 3%. Of them, those for China including materials for OPT increased by 17%. However, genuine exports were stagnant. Those for the U.S. decreased by 24%, and those for the EU decreased by 6%.