Order Fluctuation in Emerging Economies Textile exports rebound in 2014 faces challenges

According to the report on the situation of China's foreign trade in the fall of 2013 published by the Ministry of Commerce, the foundation for China's foreign trade rebound in 2014 is not yet stable. The situation is still complicated and grim. It is still under pressure and challenges. The report argues that overall demand in the international market is weak. Developed countries to speed up the "rebalancing of the economy", accompanied by the reduction of the trade deficit in the economic recovery, weakening growth in imports, weakening the role of global imports, making it more difficult for China to consolidate its developed markets. According to the survey conducted by the Ministry of Commerce on more than 1,900 key foreign enterprises linked to foreign trade, the export orders of enterprises once again appeared repeatedly in the short term, with the export orders to some emerging economies fluctuating greatly. The cost of factors such as labor force in China continued to rise. Since 2013, an additional 24 regions have raised the minimum wage, with an average increase of 18%. The average monthly income of migrant workers has increased by 13% over the same period last year. This led to a further decline in the export competitiveness of labor-intensive products, the loss of some export orders and the partial transfer of production capacity to neighboring countries. The export of labor-intensive products such as textiles and garments to Europe, the United States and Japan has been enjoying a slow growth and its market share has been declining. In the first eight months of 2013, China's exports of seven major labor-intensive products to the United States and the EU increased by 4% and 5.1% respectively, while those to Japan decreased by 0.6%, lower than the overall export growth. China's labor-intensive products account for 46.8% of the U.S. market, down 0.7 percentage points from the same period of 2012 and have fallen for three consecutive years, accounting for 66.4% of Japan's market share, down 1.7 percentage points; accounting for EU market share (Jan.-Jun. Month) 42.4%, glide 1.9 percentage points. At the same time, ASEAN and other developing countries export their labor-intensive products are gradually increasing their competitive advantage and are squeezing the market share of Chinese products. Since 2013, ASEAN labor-intensive products accounted for 0.8, 1.6 and 0.2 percentage points of market share in the United States, Japan and Europe respectively. However, some emerging industries like China's new energy sources and emerging information technologies have seen rapid growth in their exports. However, some industries are not strong in core competitiveness and their key technologies are controlled by others and their ability for sustainable development is not strong. Against the backdrop of the resurgence of international trade protectionism, trade frictions on Chinese products have been steadily increasing. In the first three quarters of 2013, 17 countries (regions) launched 63 relief investigations of Chinese exports, up by 10.5% over the same period of last year; the United States initiated 337 IPR investigations on China's export products such as electronics, telecommunications and machinery, accounting for the same period More than a quarter of the cases filed involve large leading enterprises in many strategic emerging industries in China. The report argues that as the cost of factors of production in China continues to rise and the traditional comparative advantage is weakened, the "membership bonus" tends to recede. Even though the demand in the international market has improved, the situation of China's foreign trade in 2014 is also grimmer. However, the report also pointed out that in recent years, the state has promulgated a series of policies and measures to promote the development of foreign trade, and the level of trade facilitation has been continuously improved. New trade modes such as cross-border e-commerce have developed rapidly. Many enterprises take the initiative to upgrade and export. Therefore, we can conclude that China's foreign trade will maintain a steady growth momentum in 2014.