Survey Shows Coronavirus Impact on Chinese Textile Industry -Part III

While businesses have restarted on limited basis, the impact on the companies in the survey in the first half of the year is not ambiguous if we just see some of the important indicators like business income, profits, employment and export.

A national online survey was conducted by China National Textile and Apparel Council (CNTAC) from February 7-10, with a report circulated only to limited readership to show a comprehensive outlook and insight of the textile industry by specific sectors in different provinces on the basis of 1201 respondents, just a sample of the whole textile economic fabric if we can see wood and see forest. Continuing here is Part III of the survey analysis, as estimated impact on Chinese business for the first half of 2020.

Impact on Employment

Employees being the valuable assets even though the progress of modernization and digitalization driven by AI technology is cannibalizing human jobs. 9.5% of the companies in question think that there is no impact on their employment, but there is a bulk share of the companies, who have difficulty in recalling back their workers during this time of coronavirus , as is manifested by the 21.9% of the respondents reporting over 30% laborer loss and 44.1% of the companies with reduced employment by 10%-30%, and 24.5% of the survey participants expected to have less than 10 percent loss of their operators as compared with the same period last year.

In the segmental view, we see more loss of workers in garment, knitting and base textile sectors, rating at 31.6%, 30.9% and 30% respectively. Obviously, smaller companies have less employs and expected to be more handicapped.

Estimated Impact on Employment in the Companies in the First Half of the Year

Impact on Business Income

The first half of the year will see a reduced income by more than 20% in 65.2% of the companies surveyed, and by 10%-20% in 24.5% of the respondents under survey, as businesses are hard to rehabilitate to the full potential with uncertainties still struggling with doubts whether to take more orders while workers are not yet available in full number or to wait with inadequate capacity kept running until the situation turns out to be better.

Estimated Reduction of Business Income for the First Half

Impact on Export Estimation

China’s export from textile industry constitutes around 36 percent of the global outbound shipments in this trade sector, regardless of its increased investment in overseas operations in low-income countries largely in Southeast Asia, Africa etc. The increase in labor cost might be one of the important drivers for outgoing investments, resulting in year-on-year decrease of the textile and apparel export that registered US$280.7 billion last year with a slight drop at 1.5%, but significantly 5.3 percentage points down as against the year before. In spite of the export slowdown, it is still an important pillar that supports the whole textile economy. The impact as induced by the coronavirus on the export business is much of a growing worry if the indicator continues to remain as it chalks down in the survey.

83.6% of the knitting companies, 75% of the silk textile manufacturers, 73.7% of the base textile mills and 72.5% of wool textile enterprises responded to say that they would fall by over 10 percent in export as opposed to the first half of last year. 54% of all the companies in the survey report said that they would meet over 10% down in their export business, some silk companies in particular, reported to say their shipping out business would be cut by half, consequently.

Impact on Export for the First Half of 2020 (estimated)

The article is provided with data taken from the analysis report on the basis of online nation-wide Questionnaires survey with 1201 respondents. The impact on the textile industry is given in three phases as stated previously to cover the period from the start of New Year to the middle of February, and the period all the way down to the end of the month, and the longer period for the first half of this year. The picture looks a bit gloomy as the survey report came out on February 13, amid rising cases of symptoms suspected or confirmed for the novel coronavirus, to which people are susceptible if company owners waywardly summon workers back to work. The whole situation starts to look pretty sunny as the new symptomatic cases of the disease continue to drop over 16 days across the country. More and more people take on journey back to job on meticulously-arranged basis, business will return to not where we are, but to where we aim higher. Out of the distress of dark tunnel, we walk into the hope of sunshine.

Contributed by Mr. ZHAO Hong

He is working for CHINA TEXTILE magazine as Editor-in-Chief in addition to being involved in a plethora of activities for the textile industry. He has worked for the Engineering Institute of Ministry of Textile Industry, and for China National Textile Council and continues to serve the industry in the capacity of Deputy Director of China Textile International Exchange Centre, V. President  of China Knitting Industry Association, V. President of China Textile Magazine and its Editor-in-Chief for the English Version, Deputy Director of News Centre of China National Textile and Apparel Council (CNTAC), Deputy Director of International Trade Office, CNTAC, Deputy Director of China Textile Economic Research Centre. He was also elected once ACT Chair of Private Sector Consulting Committee of International Textile and Clothing Bureau (ITCB)