Chinese foreign trade companies, which have just emerged from the first wave of domestic pressure to delay the resumption of production and work, will face the second wave of pressure: due to delayed consumption, shelved or canceled orders due to foreign epidemic control, they have to start work That is, press the pause button. Factory rents and taxes have to be paid, workers’ wages have to be paid, and some workers may be laid off… China’s nearly 50 million foreign trade employees are collectively bearing the pressure. In 2019, China’s foreign trade companies contributed 10% to GDP.
The folk joke that China plays the first half in January and February, and the world plays the second half in March and April, is widely used. Becoming embarrassed due to the butterfly effect. In the field of economy and trade, the global supply chain has been severely disrupted due to the epidemic, and “hot and cold” is a reflection of reality.
The closure of routes in many countries has severely hampered the shipment of goods, and some domestic and foreign trade companies may be on holiday
“After the efforts made some time ago, factory production has fully resumed. However, with the rapid spread of overseas epidemics, the situation has taken a turn for the worse. In the past few days, we have received many calls from the United States. , notices from European customers to postpone or cancel orders.” Sun Jianbo, general manager of Zibo Hongxu Textile Co., Ltd., told reporters. Hongxu Textile is an infant clothing manufacturer that has maintained rapid development momentum in the past two years, and its products have entered the mid-to-high-end markets in the United States and Europe.
The person in charge of an export company in Zhejiang that focuses on the European market and specializes in men’s jackets said that Europe is becoming the new center of the epidemic, and the closure of routes in many countries has led to logistics difficulties. smooth, and the shipment of export goods was seriously hampered. At the same time, the epidemic continues to spread in European countries, affecting residents’ lives. Demand in the local clothing consumer market is sluggish, and orders have dropped significantly.
“It started this Monday. Now many European and American customers are not going to work and are working from home.” When the reporter asked whether there were suspensions or cancellations of orders, a reporter from the clothing and textile industry He Hui (pseudonym) from the trading industry expressed this.
It is understood that most European and American customers served by He Hui’s clothing trading company are suspending or canceling orders in large numbers.
“Due to the impact of the epidemic, many clothing stores in Europe are closed, at least for two or three months, and even if the stores are open, business is not good, so all Orders are suspended, and some new orders may be canceled directly. This happens to 80% of the company’s European and American customers,” He Hui said.
Nowadays, the first thing He Hui does after getting up every morning has changed from paying attention to domestic epidemic data to paying close attention to foreign epidemic data. In the context of economic globalization, practitioners in the foreign trade industry, including He Hui, deeply feel that the global economy is a community and no economy can be isolated.
“Our company may start a holiday next month. As far as cash flow is concerned, we can still hold on, and we are going to take advantage of this period to reorganize the organizational structure and do some work. Internal training to survive the epidemic.” He Hui said helplessly that if there are no new orders, it will not only affect trading companies, but also upstream garment production factories, which may face a situation where they have no work to do.
Also looking forward to early control of the overseas epidemic is Afa (pseudonym), who is engaged in shoe processing and foreign trade in Guangzhou. It is understood that Afa’s shoes are mainly exported to Japan. For He Hui, he was less affected by the epidemic. Afa told reporters that although the epidemic in Japan is not serious, customers have begun to wait and see, and the next orders have not been determined.
He Hui told reporters that currently, customers around the world are in a state of panic. They have no clear ideas about the duration, impact and response measures of the epidemic. , are still in a wait-and-see state, so most of them have not explicitly stated that they want to cancel previous orders, but postpone delivery and reduce purchases first.
Under the double attack of Sino-US trade friction and the new coronavirus epidemic, a carpet company from Shandong that exports to the United States feels great pressure. The person in charge of this company said that the United States is currently suffering from the increasingly severe impact of the epidemic, with exhibitions postponed and tourism stagnant. The company’s demand for carpet products supplied to local hotels, conference centers and other places has dropped significantly, and the newly built hotels may be delayed. Or the work is suspended, and the carpets in the conference space that were originally planned to be updated will not be replaced. The market share that was already affected by the Sino-US trade friction is once again compressed.
On March 19, the Ministry of Commerce held an online press conference and stated: The new coronavirus pneumonia epidemic is spreading around the world. Confirmed cases have appeared in more than 160 countries and regions. Production and consumption in some countries have been affected, trade activities have decreased, and downward pressure on the global economy has increased. In the coming period, foreign trade companies may encounter sluggish external demand and reduced orders. And other issues.
Vietnam’s textile industry has been hit by the suspension of orders from the United States and France, and 20 million US dollars of goods may be unsalable
As the epidemic in Europe and the United States gradually worsens, Vietnamese textiles haveMarkets in Europe and the United States plummeted. Recently, there has been news of successive chargebacks for Vietnamese textile exports.
According to Vietnamese media reports, Truong Van Cam, vice chairman of the Vietnam Textile and Apparel Association (VITAS), revealed that recently, the European Union and the United States, the largest export destinations for Vietnam’s textile industry, have successively called to notify them of stopping exports from Vietnam. Order products from Vietnam. According to Vietnam, due to a significant reduction in demand from the EU, Vietnam’s exports to the EU will decline by 8% in the first and second quarters of 2020.
Take TNG, a clothing manufacturer in Thai Nguyen Province, Vietnam, as an example. According to the company, a French company has canceled Clothing orders with this business. In addition, its American buyers also informed that they would cancel or postpone their orders, and the cumulative number of these canceled or postponed orders is a staggering number. According to TNG statistics, the company’s containers with a total value of up to 20 million US dollars that were originally supposed to be shipped to the European Union and the United States are still stuck in Vietnam and cannot be exported.
Not only TNG, another Ho Chi Minh textile company in Vietnam that focuses on exporting to the United States has also recently received American buyers one after another and stop ordering for at least three weeks. In addition, Vietnamese companies are generally very worried. Many companies in Europe and the United States currently claim to be delaying orders, but as the epidemic develops, it is likely to evolve into stopping orders.
This has forced Vietnamese textile companies to consider reducing production lines, reducing employee working hours, and cutting employee wages to reduce costs in order to cope with the possible outbreak of large-scale refunds. event. This was unimaginable a month ago. At the beginning of March, Vietnam’s textile industry was still complacent. It had purchased enough textile raw materials from China to meet its production needs in March and April. Now, it has encountered a wave of order cancellations. It is true that misfortune never comes singly.
The successive suspension of orders by European and American companies has dealt a huge blow to Vietnam. As the third pillar of Vietnam’s exports, the textile industry has always been a top priority for Vietnam’s development. According to Vietnamese statistics, in 2019, the United States and the European Union became the two largest buyers of Vietnamese textiles, with a share of 45% and 13% respectively. According to Vietnam’s goal, Vietnam’s textile industry exports will reach US$42.5 billion in 2020. In fact, in the first two months of 2020, due to the increasing difficulty in purchasing Chinese raw materials, Vietnam’s textile and clothing exports did not achieve expected growth. Instead, they fell by 3.5% to only US$5.3 billion, which was far from the average monthly target of US$7.1 billion. , there is still quite a long way to go.
Vietnam is very dependent on China’s textile raw materials. According to Vietnamese statistics, in 2019, 60% and 55% of Vietnam’s imported fabric and fiber markets respectively came from China. At the end of February, China restored the supply of most raw materials, and the Vietnamese textile industry finally successfully obtained a large amount of raw materials exported by Chinese companies, which can roughly meet the production needs in March and April, and there is no need for the crisis of shutdown due to shortage of raw materials. Europe and the United States Other companies came to cancel orders again.
This makes it likely that Vietnam will not be able to achieve the export target set for 2020. Because if Vietnam wants to successfully achieve this goal, the average export of the textile industry must be US$3.72 billion per month in the future. The current continuous cancellation of orders by European and American companies, as well as the possible cancellation of orders as the epidemic gradually worsens in the future, make it very difficult for Vietnam to successfully achieve its export target of US$42.5 billion. In fact, Vietnam’s export target of US$40 billion in 2019 has been missed, with the actual value being only US$39 billion. </p
