In 2023, the knitting industry is facing a complex and severe external environment, the new crown pneumonia infection scar effect, geopolitical conflict, the intensification of the big country game, etc. led to the contraction of overseas demand, lack of endogenous power, international order transfer, the quality of industry operations under pressure. However, the whole industry withstood the pressure, overcome difficulties, innovation and change, and did everything possible to resolve the unfavorable factors. The industry as a whole rebounded to the better, and revenue, profit and export all showed marginal improvement.

01 The overall recovery of the industry is good, and the proportion of knitted clothing continues to increase.

According to data from the National Bureau of Statistics, in 2023, the main business income of enterprises in the knitting industry fell by 4.17 year-on-year, and the rate of decline narrowed by 0.55 percentage points from the first three quarters of 2023. Among them, knitted fabric regulations on the business of enterprises fell 1.78 percent year-on-year; knitted clothing regulations on the business income of enterprises fell 5.53 percent year-on-year. The performance of knitted fabric weaving link is better than that of terminal knitted clothing.

In terms of knitted apparel production, although it has shrunk year-on-year, with the continuous innovation of consumption scenarios, consumption habits have shifted to leisure and sports, which has prompted great progress in the production process of knitted outerwear fabrics; shirts, suits, ladies jackets, sunscreen clothing, etc. The development and application of knitted apparel products has increased rapidly, and the proportion of knitted apparel continues to rise. In 2023, garment production in regulated enterprises fell 8.69 per cent year-on-year, of which knitted garment production fell 5.08 per cent year-on-year. At present, the proportion of knitted garment production in total garment production is 66.19, which is 4.06 percentage points higher than that in 2022.

02 Operational optimization, steady improvement in earnings quality

According to the National Bureau of Statistics, total corporate profits in the knitting industry fell 4.22 percent year-on-year in 2023, 2.38 percentage points lower than in the first three quarters of 2023 and 6.59 percentage points lower than in 2022. Among them, the total profit of knitted fabrics increased by 1.35 year-on-year, and the growth rate turned from negative to positive; the total profit of knitted garments decreased by 7.14 year-on-year.

In 2023, the profit margin of regulated enterprises in the knitting industry was 4.32, an increase of 0.45 percentage points from the first three quarters of 2023, and maintained the 2022 level; the loss area continued to decline, and the annual loss level was 19.27, compared with the first three quarters of 2023. A decrease of 5.37 percentage points, a decrease of 0.35 percentage points from 2022; the total asset turnover rate and the finished product turnover rate slowed slightly year-on-year, but basically remained within a reasonable range.

03 Domestic sales continue to pick up, consumer hot spots appear frequently

In terms of domestic sales, with the continuous force of a series of national promotional fee policies, the gradual recovery of offline consumption scenes, shopping festivals and other promotional means to stimulate consumer enthusiasm, the domestic market showed a gradual recovery. In 2023, the annual GDP exceeded 126 trillion yuan, an increase of 5.2 percent over the previous year. The total retail sales of consumer goods for the whole year was about 47 trillion billion yuan, an increase of 7.2 over the previous year, and an increase of 7.4 percentage points over 2022. Among them, the retail sales of clothing, shoes and hats, and knitwear products above the quota increased by 12.9 year-on-year, and the retail sales of physical goods online wear goods increased by 10.8 year-on-year.

With the gradual recovery of offline scenes, brands on the sub-scene deep mining, innovation. Lightweight outdoor knitted clothing, knitted sunscreen clothing containing high-tech functional fibers, outdoor assault clothing, ski clothing subdivision products sell like hot cakes, children's outdoor sports clothing in the blue sea. Mass consumption is becoming more and more rational, from focusing on "cost-effective" to focusing on "heart-to-price ratio", "flat replacement" and "white brand" have become consumer buzzwords, processors and brands have ushered in a period of development opportunities.

04 The decline in exports gradually narrowed, breaking another $100 billion for the year.

In 2023, my country's knitted product exports exceeded 100 billion U.S. dollars for the third consecutive year during the 14th Five-Year Plan period, with a cumulative export of 104.094 billion U.S. dollars for the whole year, a year-on-year decrease of 9.36 percent on the basis of last year's high base. Among them, the export of knitted fabrics was 21.523 billion US dollars, down 9.3 percent year-on-year; the export of knitted garments and accessories was 82.571 billion US dollars, down 7.8 percent year-on-year.

From the perspective of the export market, the export structure of China's knitted products continues to adjust, and the trade market is diversified. In 2023, China's exports of knitted products to the United States, ASEAN, the European Union and Japan fell by 12.24, 13.51, 17.73 and 12.75, respectively. During the same period, China's exports to Central Asia, the Middle East, Russia and other countries and regions performed well. In 2023, my country's exports of knitted products to the five Central Asian countries increased by 45.41 year-on-year; exports to Russia increased by 20.64 year-on-year; exports to Turkey increased by 18.71 year-on-year. In addition, exports to Nigeria, Cameroon, Brazil and other countries also achieved good growth.

In terms of sub-categories, exports of T-shirts, socks and other products fell less in 2023. Among them, the export decline of velvet fabric, underwear and home clothes was significantly narrowed, 4.55 and 5.00 percentage points respectively compared with the first half of the year.

Local customs data show that in 2023, exports in Xinjiang, Guangxi, Hubei, Sichuan and other central and western provinces and cities grew rapidly, with export growth rates of 58.13 percent, 18.42 percent, 45.70 percent and 55.26 percent, respectively. At present, the total export volume of the five eastern coastal provinces accounts for 75.24 percent of the country's total, which is 2.18 percentage points lower than that in 2022. During the same period, the proportion of exports of central and western provinces and cities has increased, and the industry has further coordinated development in the east, middle and west. In the future, with the continuous release of the policy effect of the Belt and Road Initiative, the establishment of the Xinjiang Free Trade Zone and the implementation of the policy of opening to the north will create more favorable opportunities for exports in the central, western and northeastern regions of my country.

Looking forward to 2024, the domestic economy is expected to continue to pick up for the better, but the task of stabilizing growth, adjusting structure and promoting reform is still arduous, and the recovery of consumption and investment confidence is still under pressure. The lack of effective domestic demand, the contraction of external demand, the low-cost competition of e-commerce live broadcast platform, the trend of "inner volume" of industry prices may intensify, and the repair of enterprise benefits is still facing challenges.

In terms of international trade, geopolitical risks are rising, the game of great powers is intensifying, the global trading system is in a fragile period on the eve of the establishment of a new order, and the world will face more uncertain factors. The International Monetary Fund (IMF) predicts that global economic growth will slow to 2.9 per cent in 2024, with little improvement on the demand side of the international market. From the perspective of the inventory cycle of overseas clothing brands, destocking is coming to an end, and subsequent procurement demand will increase, but it is difficult to offset the far-reaching impact of international supply chain restructuring on the industry. It is expected that industry exports will continue to decline in 2024, continue to return to the normal development before the epidemic, cross-border e-commerce will accelerate development. The export market showed a trend of "rising from the east to the west", that is, exports to developed economies in Europe, America and Japan declined, while exports to countries along the Belt and Road increased, and market share was concentrated in leading enterprises with international supply chain layout and core competitive advantages.