Industry Data: China'S Apparel Industry Economic Operation Briefing In 2022

In 2022, under the influence of risk factors such as weak domestic and international market demand, high raw material costs, and more complex foreign trade environment, the pressure on the economic operation of China's clothing industry will increase significantly, and the overall development trend will continue to slow down. In December, with the optimization and relaxation of the national epidemic prevention policy and the gradual entry of most residents into the stage of virus infection, the production and marketing cycle has gradually recovered, but the market demand has not improved significantly. The decline in production, domestic sales, and efficiency indicators of the clothing industry has continued to expand, and the monthly export has continued to grow negatively. Looking forward to 2023, the pressure for China's clothing industry to maintain a restorative growth is still great. We must adhere to the general tone of "seeking progress while maintaining stability", focus on the industrial development orientation of "science and technology, fashion, and green", comprehensively deepen reform and opening up, vigorously implement the "three products" strategy of the consumer goods industry, promote the intelligent upgrading of enterprises and the modernization of the industrial chain, and enhance the core competitiveness of the industry, Leading the high-quality development of the industry with innovation driven to achieve new results.

　　 01 Economic operation of clothing industry

Apparel production declined significantly

In 2022, the production growth rate of China's clothing industry will continue to fall, and the industrial added value and clothing output of enterprises above designated size will show a small negative growth, and the decline will gradually deepen. According to the data of the National Bureau of Statistics, from January to December 2022, the industrial added value of enterprises above designated size in the clothing industry decreased by 1.9% year on year, with an increase rate of 10.4 percentage points lower than that of the same period in 2021. The decline in industrial added value of enterprises above designated size in the clothing industry has continued to deepen in each month since July, with a year-on-year decrease of 11.4% in December. Over the same period, enterprises above designated size completed 23.242 billion pieces of clothing production, a year-on-year decrease of 3.36%, 1.88 percentage points more than the first half of the year, and 11.74 percentage points less than the same period in 2021. From the perspective of the output of major categories of clothing, from January to December 2022, the output of woven clothing of enterprises above designated size in the clothing industry will be 8.802 billion pieces, down 5.15% year on year, and the output of knitted clothing will be 14.44 billion pieces, down 2.24% year on year, with growth rates down 10.0 and 13.1 percentage points respectively from the same period in 2021.

Figure 1 Production Growth of Clothing Industry from January to December 2022

Data source: National Bureau of Statistics

　　 The domestic market remains weak

Influenced by factors such as the spread of the domestic epidemic in many places and the weakening of demand, the domestic clothing market in China declined significantly. Although the national epidemic prevention policy was optimized and relaxed in December, most of the residents in the region were in the stage of virus infection, and the domestic clothing market did not show an obvious recovery trend. According to the data of the National Bureau of Statistics, from January to December 2022, the retail sales of clothing goods of units above the designated size in China totaled 922.26 billion yuan, a year-on-year decrease of 7.7%, and the growth rate was 21.9 percentage points lower than that of the same period in 2021; In December, the retail sales of clothing commodities of units above the designated size fell 14.2% year on year. The sales of physical stores dropped significantly. According to the statistics of China National Business Information Center, from January to December, the clothing retail sales and retail volume of national key large-scale retail enterprises dropped 14.79% and 18.61% respectively year on year. In December, the clothing retail sales and retail volume fell 34.32% and 38.80% respectively year on year. Online clothing retail grew steadily. From January to December, online retail sales of clothing products increased by 3.5% year-on-year, 0.1 percentage points faster than that from January to November, and 4.8 percentage points slower than that in the same period of 2021.

Figure 2 Clothing sales in the domestic market from January to December 2022

Data source: National Bureau of Statistics

　　 Exports maintain a small growth

In 2022, the scale of China's clothing exports will continue to grow slightly on the basis of a high base. However, from the monthly data, the growth rate of clothing exports shows a trend of rising before falling. In December, driven by positive factors such as the short-term increase in international market demand stimulated by Christmas season promotions, the decline in exports narrowed. According to Chinese customs data, from January to December, China's clothing and clothing accessories exports totaled US $175.397 billion, an increase of 3.2% year on year, 20.8 percentage points slower than that in 2021; In December, China's clothing exports fell 10.1% year on year, 6.7 and 4.3 percentage points lower than those in October and November respectively. From the perspective of the volume price relationship, the volume of clothing exports fell and the price rose, and the price pulling effect was significantly enhanced. The export volume of clothing was 31.216 billion pieces, down 2.6% year on year, and the average export unit price was 4.65 US dollars/piece, up 10.0% year on year.

Figure 3 Exports of China's clothing and clothing accessories from January to December 2022

Data source: China Customs

The export of cotton clothing has a negative growth, while the export of commuting, overcoat and winter clothing with high added value and sportswear has maintained a rapid growth. According to Chinese customs data, from January to December, China's cotton clothing exports fell 1.9% year on year, and in December, the cotton clothing exports fell 16.6% year on year; Among them, China's cotton clothing exports to the United States and the European Union decreased by 5.7% and 0.5% respectively year on year. In December, China's cotton clothing exports to the United States and the European Union decreased by 32.7% and 35.0% respectively. From the perspective of export categories, the export volume and price of winter coats, suits, casual suits and dresses rose at the same time, with the export volume increasing by 16.0%, 39.2%, 24.1% and 6.4% respectively year on year, and the export unit price increasing by 5.8%, 17.2%, 3.7% and 3.4% respectively year on year; The export of sports clothing such as skiing and swimming has maintained a rapid growth driven by the quantity, with the export quantity increasing by 20.6% year on year and the export unit price decreasing by 1.5% year on year. In addition, the export of down jacket and trousers maintained a small growth, but the volume fell and the price rose. The export volume decreased by 8.0% and 5.6% respectively year on year, and the export unit price increased by 11.2% and 9.5% respectively year on year.

China's clothing exports to traditional markets continued to decline, while its exports to emerging markets such as ASEAN, countries and regions along the Belt and Road maintained rapid growth. According to Chinese customs data, from January to December, China's clothing exports to the United States amounted to 38.61 billion US dollars, down 2.2% year on year, and the growth rate was 38.4 percentage points slower than that in 2021. In December, China's clothing exports to the United States fell 23.3% year on year; China's clothing exports to the EU totaled US $33.317 billion, up 3.0% year on year, 18.3 percentage points slower than that in 2021. In December, China's clothing exports to the EU fell 30.2% year on year; China's clothing exports to Japan amounted to US $14.612 billion, down 0.3% year on year, and the growth rate was 6.6 percentage points slower than that in 2021. Over the same period, China's clothing exports to emerging markets such as ASEAN, countries and regions along the Belt and Road increased by 14.6% year on year, of which China's clothing exports to ASEAN amounted to US $16.928 billion, up 23.9% year on year. ASEAN surpassed Japan as China's third largest trading partner in clothing exports; China's clothing exports to countries and regions along the Belt and Road and Latin America increased by 12.9% and 17.8% respectively, and clothing exports to other members of RCEP except ASEAN and Japan increased by 8.3% year on year. In addition, China's clothing exports to the UK fell 12.6% year on year, while those to Russia and Canada fell 19.4% and 16.0% year on year respectively.

Garment exports of Guangdong, Jiangsu and Fujian provinces declined, while those of Zhejiang and Xinjiang grew against the trend. According to Chinese customs data, from January to December, among the top five garment export provinces in China, Zhejiang's garment export value was 34.88 billion US dollars, up 13.1% year on year; Shandong clothing export reached 19.74 billion US dollars, up 4.6% year on year; The clothing exports of Guangdong, Jiangsu and Fujian decreased by 7.4%, 1.1% and 9.8% year on year, respectively, accounting for 1.9, 0.6 and 1.3 percentage points of the national clothing exports. Over the same period, among the central and western provinces, Xinjiang's clothing exports continued to maintain a rapid growth rate of 71.8%; The clothing exports of Jiangxi, Hunan and Guangxi increased by 21.8%, 36.4% and 18.4% year on year respectively, while the clothing exports of Anhui, Hebei and Hubei decreased by 6.0%, 39.8% and 9.2% year on year respectively.

　　 The decline of enterprise benefits deepened

In December, as most regions in China entered the stage of virus infection, the market demand did not improve significantly, the business pressure of enterprises was still high, and the operating revenue and total profit continued to grow negatively. According to the data of the National Bureau of Statistics, from January to December, there were 13219 enterprises above the designated size (annual main business income of 20 million yuan and above) in the clothing industry of China, achieving an operating income of 1453.889 billion yuan, a year-on-year decrease of 4.56%, 1.3 percentage points higher than that from January to November; The total profit was 76.382 billion yuan, down 6.34% year on year, 1.08 percentage points lower than that from January to November; The operating income profit margin was 5.25%, 0.1 percentage point lower than that in the same period of 2021. The scope of industry losses has expanded, and the operating efficiency has slowed down. From January to December, the loss area of enterprises above designated size in the clothing industry reached 19.37%, 2.52 percentage points higher than the same period in 2021, and the loss amount of loss making enterprises increased by 12.46% year on year; The turnover rate of finished products, accounts receivable and total assets decreased by 4.87%, 4.50% and 3.62% year on year respectively.

Figure 4 Main benefit indicators of clothing industry from January to December 2022

Data source: National Bureau of Statistics

　　 Investment maintained rapid growth

Since 2022, fixed asset investment in China's clothing industry has maintained a rapid growth trend, but the growth rate has slowed down. According to the data of the National Bureau of Statistics, from January to December, the completed investment in fixed assets in China's clothing industry increased by 25.3% year on year, 8.5 percentage points slower than the first half of the year, 21.2 percentage points higher than the same period in 2021, and 20.6 and 16.2 percentage points higher than the overall level of the textile and manufacturing industries.

Figure 5 Growth rate of fixed asset investment in clothing industry from January to December 2022

Data source: National Bureau of Statistics

　　 02 Development trend of clothing industry in 2023

In 2023, the global economic growth will slow down, and the prospect of demand recovery in the international market will be highly uncertain. The endogenous power of domestic economic growth will continue to accumulate and strengthen, and the overall trend of stabilization and improvement will not change. At the same time, multiple transformation forces, such as demand reshaping, technological breakthrough, industrial adjustment and policy upgrading, are converging, and new technologies, such as cloud computing, artificial intelligence, 5G, blockchain, and metauniverse, are accelerating their upgrading and iteration, which increasingly become the driving force to promote productivity leap. Under this background and trend, China's clothing industry will enter a recovery and normalization development cycle after experiencing a phased decline. Based on the low base effect of industry operation in 2022 and the strong support of the domestic big cycle, it is expected that the overall economic operation of the industry will improve in 2023, and the development trend of "resilient growth, steady recovery" will be obvious.

　　 international market

From the perspective of the international market, under the influence of insufficient demand in the international market, transfer of overseas orders, Sino US trade frictions, RMB appreciation and other factors, China's clothing exports will face greater downward pressure in 2023, and the overall growth rate will decline before and then flatten, and the scale will shrink significantly. However, it should also be noted that with the end of destocking by overseas retailers and brand groups and the containment of global inflation, market consumption demand and replenishment demand are gradually restored, overseas orders may pick up in the second half of the year, and the clothing export situation will improve accordingly. At the same time, the "Belt and Road" and RCEP and other trade cooperation agreements continued to advance, and the new marketing mode of "platform drainage+content grass planting+live broadcast with goods" promoted the accelerated development of cross-border e-commerce, which will further promote the high-quality development of clothing foreign trade exports.

　　 domestic market

From the perspective of the domestic market, the overall improvement of China's economy has created good conditions and foundation for the recovery of the domestic clothing market. The economic recovery has led to the expansion of employment and the increase of residents' income, the increase of offline contact and agglomeration consumption, the continuous enhancement of residents' consumption ability and willingness, the accelerated release of consumption demand, and the superposition of low base factors, It is expected that China's clothing consumption market will continue to recover in 2023, and the consumption scale will steadily increase. In 2023, the state and governments at all levels will continue to strengthen macro policy regulation, firmly implement the strategic deployment of expanding domestic demand, and make efforts to promote the quality and expansion of the domestic demand market through the superposition of stock policies and incremental policies. The Action Plan for Digitizing the Consumer Goods Industry "Three Products" (2022-2025) released by the Ministry of Industry and Information Technology has entered the promotion stage, which will continue to promote the vigorous development of new business types, new scenarios, new products and new brands, and help the domestic clothing market return to the positive growth track from both supply and demand.

In general, in 2023, in the face of a severe and complex external environment and arduous tasks of reform, development and stability, China's clothing industry will still face great pressure to maintain its restorative growth. Adhering to deepening transformation and upgrading, improving industrial resilience and risk resistance will remain the core of industry development. Under the general trend of global industrial transformation, China's clothing industry will continue to strengthen the integration and innovation of the digital economy and the real economy, fully promote the construction of industrial intelligent manufacturing and industrial Internet platforms, deeply practice cultural self-confidence and green development, aggregate the development potential of new technologies, new models, and new formats, and drive the industry to accelerate the transition to intelligence, high-end, and green, Promote China's garment industry to a new height in the global industrial chain value chain.

(Source: China Garment Association)