Chinese textile manufacturers are struggling with decreased orders amid increasing rivalry with regions without Covid-19 restrictions. For 85 per cent garment enterprises there is a significant loss of orders. Since the second quarter of this year, North American and European offline exhibitions have reopened. This is having an adverse effect on China's orders. Domestic firms are struggling to develop new customer relationships abroad and show their products offline amid the country's Covid Zero strategy and rising logistics costs.
In the first half, some $6 billion worth of textile orders were transferred out of China, mainly to India, Bangladesh, Vietnam, Indonesia, and Cambodia. It is expected that in the second half, the trend may accelerate. The effect can be felt at the grassroots level. This year, orders tally were at least 40 per cent less than last year.
But there are bigger issue is poor demand. In the first half, domestic textile and apparel consumption fell nearly 20 per cent, and foreign markets are also shrinking. The overall loom operating rate in Jiangsu and Zhejiang provinces is currently less than 50 per cent, the lowest in the past five years.
