China's garment enterprises still have obvious export advantages

Editor's note: With regard to the recent concerns of some market participants that “the US and the US have to face sluggish external demand and rising labor costs will weaken China’s export competitiveness”, two foreign bank economists analyzed that the latest statistics show that the mainland’s foreign trade performance has not been affected. European debt crisis.

With regard to the recent concerns of some market participants that "the US and Europe are in a sluggish market and rising labor costs will weaken China's export competitiveness," two foreign bank economists analyzed that the latest statistics show that China's foreign trade performance has not been affected by the European debt crisis. The impact, while product upgrades and productivity enhancements in mainland China partially offset the pressure of rising costs, and mainland China's export competitiveness remains.

According to Liang Zhaoji, senior economist of DBS Bank’s Economic Research Department, China’s exports to Europe in July and August increased by 22.3% over the same period, exceeding the 16.6% increase in the second quarter of 2011. He believes that the export demand suppressed by the Japan earthquake earlier in 2011 has been released to support China's foreign trade data. It is expected that China's exports and imports will increase by 23.8% and 25.6% respectively in the third quarter of 2011.

"Although the debt crisis in Europe has worsened since early May, the trade performance of the Chinese mainland has not been affected so far." Liang Zhaoji said, "The potential positive surprises in foreign trade, coupled with steady growth in investment, are expected in the third quarter of GDP in mainland China. The growth rate will reach 9.4%.” Cui Lijian, chief China economist at Royal Bank of Scotland, analyzed that from 2004 to 2009, although the unit labor cost (ULC) per unit of output value in US dollars in mainland China rose by 50%, the overall In terms of the situation, the loss of competitiveness in the export trade in mainland China did not occur. She said that although labor costs have continued to rise, China’s share of the global market has increased from 7% in 2005 to 11% in 2010. The increase in exports from capital-intensive industries is one of the important reasons. Electromechanical and transportation have now become China. The largest export category in the mainland, in these areas, the impact of increased labor costs is relatively small.

China’s dominant position in the labor-intensive light industry has not been lost. In the past five years, China’s exports of light industrial products in the global market have increased from 22% to nearly one-third. According to Cui Li’s analysis, the reason that the increase in labor cost does not affect the exports of light industrial products in mainland China is: Chinese mainland companies urge product upgrades and move to the high end of the value chain. In recent years, rapid market expansion has promoted the improvement of production efficiency in Chinese mainland enterprises. The market share coupled with the upgraded product mix has enabled mainland Chinese manufacturing companies to have a certain pricing power at least in the short term.