European Debt Crisis: Garment Exports Represent Negative Growth in the Third Quarter

In recent days, the euro exchange rate has continued to fall. The market can not help but worry that whether the European debt crisis will evolve into a Euro exchange rate crisis will further evolve into a new round of global economic crisis. Industry insiders expect that China's exports to the EU will slow down or even return to negative growth since the second quarter or third quarter of this year, and relevant companies and departments will be called upon to issue relevant policies as soon as possible.

"As can be seen from the Canton Fair, there are signs of weakness in EU procurement," said Ma Xinzheng, deputy editor of First Textiles. Huo Jianguo, dean of the Research Institute of the Ministry of Commerce, once pointed out that it is expected that in May and June and even the third quarter, China's export growth to Europe may decline by 6% to 7%.

“Langtai A, a domestic leading textile company, for example, due to the decline in export orders, the company’s revenue growth last year was only 2.9%.” Wang Rong, a joint securities analyst, said that the company’s annual growth before the financial crisis was 20% to 30%.

At the same time, the exchange rate risk caused by the European debt crisis is also placed in front of companies.

However, there are also optimistic insiders pointed out that due to market demand pick up, the third quarter of this year will remain the same level as the previous two quarters.

The data shows that with the slow recovery of the global economy, in the first quarter of this year, the demand of major exporting countries and regions in the Chinese garment industry in Europe, the United States, Japan, and South Korea also rebounded significantly.

“The most important exports of Chinese textiles and garments to Europe, such as Germany and France, are relatively stable. Greece and other countries that have experienced a debt crisis have a very small share of China’s textile and apparel exports. Look, China's textile and clothing exports to the EU are relatively normal, but the future may not be optimistic." Ma Xinzheng said.

Ma Xinzheng pointed out that the declining exports to the EU market will mean that the days of textile manufacturing are even more difficult, and the cycle of adjustment will inevitably be further extended. Relevant companies and departments have introduced relevant policies as soon as possible to cope with the more severe export situation and ensure the realization of the growth target.