Trade of PR China in 2018
Chinese full year 2018 exports advanced 9.9% to USD2.49 trillion which was the strongest performance in seven years. The import value continued surging at double-digit pace, up 16.0% to USD2.14 trillion. Hence, the trade balance further narrowed to USD352 billion.
These results bear witness to the robust and competitive economy despite the trade war with the United States, largest export destination with an almost 20% share, and a globally slowing economy. Consequentially, December exports fell 4.6% year-on-year to USD221 billion, the steepest drop since March 2016.
Nevertheless, trade surplus with the United States was the largest in more than a decade. Exports rose in the second consecutive year at double-digit rate to USD478 billion, up 11.3%, while imports meagerly increased 0.7% to USD155 billion. Thus, last year’s surplus amounted to USD323 billion.
It remains to be seen whether both governments will be able to resolve the trade dispute by March as additional tariffs may disrupt global supply chains and negatively impact the world economy. Despite growing tensions in recent years over economic and trade issues, any obstruction of trade would go into the opposite direction of Chinese government that has lowered or removed duties on a number of items starting 2019 in an attempt to further opening up the economy and to support the Belt and Road Initiative.
Textile and garment trade value also grew in the second year in a row. Textile shipments jumped 8.5% to USD119 while garment exports succeeded to rebound after a three-year decline. They increased 0.3% to USD158 billion which resulted in a total sector’s export performance of USD277 billion, up 3.7%. Corresponding imports included a 3.0% growth of textile articles to USD18 billion with clothing even surging 14.8% to USD8 billion. In total, the trade surplus has improved 3.4% to USD251 billion.
Chinese industry is gradually shifting its role in the world textile and apparel supply chain as its market shares by value continue to lessen. Its share into the three largest import markets, namely the United States, EU, and Japan, indicate a clear downward trend in recent years. According to ten-month data published by the Office of Textiles and Apparel the share into the United States slowed to 36.5% in 2018 after growing its shipments by 4.9% to USD34.5 billion while total imports rose 5.3%. The value into 28-nation EU fell for the January to October period by 0.9% to EUR31.7 billion according to Eurostat and full year 2018 Japanese Government Statistics reveal a drop to a share market of 58% in local currency versus almost 79% in 2009. This development is result of the country’s rapidly rising degree of industrialization which prevents to keep comparative advantages in making labor-intensive garments. Hence, brands and retailers are increasingly searching for alternative apparel sourcing bases to PR China. Nevertheless, Chinese position in this industry will further gain weight due to the importance as supplier of textile materials to Asian apparel-exporting nations and the country’s active role in foreign investments.