The season for Christmas orders has passed, and Chinese exporters do not yet see the slightest trace of any rebound. The export market for Chinese goods next year shows no promise and is hovering near its lows.
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On the Pearl River Delta, China's major export base, orders at many shoemakers were already low as the situation has gone from bad to worse. According to China Business News, a European customer's sudden cancellation of an order for original high-end shoes at an unnamed company might cause that company's bankruptcy as it has already bought materials and entered production.
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The textile and garment industry has as little cause for optimism. Zhong Haoshen, assistant general manager of the Textile Import & Export Corporation of Guangdong Province, says that in the current export situation, customer risks have increased. Previously, his company bought export credit insurance only for orders from emerging markets such as in the Middle East and Africa to reduce losses when customers cancelled orders or refused to pay. Now it is insuring against losses from European and American markets. Many small businesses, however, can not afford the premiums.
The upcoming Canton Trade Fair over the second half of October will be, as always, an important platform for export enterprises, but analysts see no reason to believe the situation will improve. Most customers will likely take a "look and see" attitude instead of rushing to order and will make final decisions depending on this year's Christmas sales. But mall sales in the US and the EU and other major markets continue to show a downward trend, and export risk increases as both suppliers and demanders become more cautious. Whole-year big orders have turned into two-to-three-month short orders, leaving an unstable field for everybody.
Customs data show that the August value of textile and garment export totaled $15.7 billion, down 15.6%, year-on-year, and 4.1% compared to July. In this year's first seven months, the total value of textile and garment export amounted to $89.17 billion, down 11.15%, year-on-year.
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The instability of textile and apparel orders appeared in the first several months, and then recurred in August, when year-on-year decline of growth continued, and month-on-month growth greatly declined after two consecutive months of rise. The outlook remains low, as export decline is greatly related to sluggish demand.
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July retail market figures in the US continued to decline. Sales of Abercrombie & Fitch, the largest US casual wear brand, fell 28%. Leisure and fashion giant GAP's numbers fell 8%. Declines at department store chains such as JC Penney and Saks have totaled more than 10%, and even discounter Costco's sales have dropped 7.0%.
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Chinese enterprises have been actively adjusting business strategies to supply the National Day golden week, October 1-8. Despite reduced prices, the domestic market must play a more important role in alleviating export pressure.
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