Orders back to China are back! Global orders are strong, but China's exports in this industry a

Since joining the World Trade Organization, China's manufacturing industry has actively participated in the global division of production based on its labor advantage. According to the Ministry of Industry and Information Technology, my country's manufacturing industry has ranked first in the world for 11 consecutive years. It is not only large in volume, but also has made major breakthroughs in innovation in key areas.

Thanks to factors such as low labor costs, sufficient power and energy supply, and little pressure on environmental protection, China has become the "world's factory". Among them, Wind data shows that in 2020, the number of Chinese shoes and boots exported is 7.4 billion pairs, and the number is 7.858 billion pairs in the first 11 months of 2021.

However, during the epidemic, because China took effective epidemic prevention measures, manufacturing factories were able to operate step by step. In contrast, in Southeast Asia, inappropriate epidemic prevention measures once stalled the progress of factory orders. Subsequently, some large orders returned to China.

According to data released by the China Federation of Logistics and Purchasing, China's manufacturing PMI has risen for two consecutive years, laying the foundation for the stability of the Asian economy.

And what is the current situation of Southeast Asian manufacturing?
Southeast Asia's manufacturing industry recovers
According to a previous report released by the Portuguese Footwear Association (Apiccaps), Asia is the concentration of global footwear production, accounting for 87.6% of the production in 2020, far ahead of other continents. In terms of countries, from 2017 to 2019, China continued to be the world's largest producer of footwear, but the proportion of output droped from 57.5% to 55.5%.

The total output of Southeast Asian countries India, Vietnam and Indonesia, which ranked 2nd to 4th, accounted for 19.6%, 21.4% and 21.6% respectively, showing an upward trend.

The rise of the manufacturing industry in Southeast Asia has reduced the export volume of China's footwear industry by 66 billion US dollars. Calculated at the current exchange rate of the US dollar against the RMB, the loss is 430.42 billion yuan.

The decline is partly due to a dro in orders brought about by the U.S.-China trade war. At the same time, it is also partly due to the rising labor costs in China that some companies have begun to move to Southeast Asia.

It is worth noting that, if there is no outbreak of the epidemic, Vietnam's footwear industry exports will rise steadily. Because Wind data shows that Vietnam’s annual export of footwear has reached US$18.318 billion in 2019 from less than US$5 billion before 2010.

Today, Vietnam's manufacturing industry is gradually recovering. Vietnam's GDP grew by 5.22% in the fourth quarter compared with the same period last year, higher than the revised -6.02% in the third quarter, according to data released by the Vietnam Statistics Authority.

In terms of import and export, Vietnam's exports in December increased by 24.8% year-on-year, and imports in December increased by 14.6% year-on-year; the annual export increased by 19% year-on-year, and the import increased by 26.5% year-on-year. In December, Vietnam's manufacturing industry grew by 10.9% from a year earlier.

Indonesia becomes a new choice for manufacturing factories
In addition to Vietnam, Indonesia has also received attention. Indonesia Business Daily reported that according to the Indonesian Footwear Association (Aprisindo) records: the world's largest shoe factories are targeting Indonesia, Indonesia has become a new destination for other factories.

In this regard, the vice chairman of the Indonesian Footwear Association said that the above-mentioned shoe factory relocation plan is related to the strict closure of the city by the Vietnamese government. "It seems that producers are starting to target Indonesia, they are looking for land, they are planning to build factories. A major company is preparing to relocate operations to Indonesia," he said.

He also emphasized that the supply of raw materials for footwear is a serious challenge if we want to absorb more investment funds to Indonesia. Because Indonesia's industry relies on imported raw materials, one of which comes from Vietnam.

A large number of orders diverted from Vietnam has had an impact on the increase in production capacity of Indonesian industry. Even, for export purposes, the capacity utilization rate of the Indonesian shoe industry has reached 100%. In addition to the obstacles of raw materials, the industry is still facing the uncertainty of the new crown pneumonia epidemic in 2022.

"Vietnam, for example, is one of the most reliable and competitive industrial countries, but its manufacturing industry is going through a 'cold winter' because of the Covid-19 pandemic. Like other countries, our main challenge is to control Covid-19. epidemic."

One of Indonesia's attractions is the promise of meeting orders despite restrictions, according to the Indonesian Footwear Association. This is largely due to the implementation of the business and industrial activity mobility permit strategy by the Indonesian Ministry of Industry.

Indian garment exports hit record
In addition, the Indian manufacturing industry is also gradually coming out of the shadow of the epidemic. In December 2021, India's monthly apparel exports reached $37.29 billion, up 37% from the same period last year, with exports reaching a record $300 billion in the first three quarters of the fiscal.

According to recent data from the Indian Ministry of Industry and Commerce, from April to December 2021, garment exports totaled $11.13 billion. In a single month, the export value of clothing in December 2021 was US$1.46 billion, a year-on-year increase of 22% and a month-on-month increase of 36.45%;

India's exports of cotton yarn, fabrics and home textiles in December were $1.44 billion, up 46% year-on-year and 17.07% month-on-month.

India's merchandise exports totaled $37.3 billion in December, also the highest in a single month of the year. In December 2021, India's monthly apparel exports reached a record high of $37.29 billion, up 37% year-on-year.

According to the Apparel Export Promotion Council of India (AEPC), judging from the recovery of global demand and the stability of orders from various brands, Indian apparel exports will continue to rise in the next few months, or reach a record high.

India's apparel exports in 2020-21 fell by about 21% earlier due to disruptions due to the Covid-19 pandemic. However, it can be seen from the above data that Indian clothing exports have come out of the blow of the epidemic, which is not only due to the help of the outside world, but also inseparable from the implementation of policies.

The first is the establishment of PM-Mitra (a large integrated textile and garment park) approved on October 21, 2021, with a total amount of 4.445 billion rupees (about 381 million US dollars) for a total of seven parks.

Secondly, the Production linked Incentive (PLI) scheme for the textile industry approved on December 28, 2021, with a total amount of 1068.3 billion rupees (about 14.3 billion US dollars).