The latest news from the Chinese economy in April have reported weak consumer demand. Imports into China fell 1.8% from a year earlier as analysts fear any indications of recovery may be short lived following strong export figures recorded in March.
What does this mean for UK exports of fashion and textiles goods to China? Whilst UK trade data lags by a month, the patterns picked up so far in 2016 to March indicate a similar trend although it will be interesting to see if April has a similar message to the macro picture once this data is available.
As previously reported, growth in fashion exports to China has been a phenomenon over the past five years as UK goods are increasingly popular amongst affluent and growing middle classes that are increasing in number as China continues its development.
Overall, March was a very good month for exports with £13.3m worth of goods finding their way to China from the UK. This is £3m more than in the corresponding month in 2015. Only, November 2015 exhibited a larger monthly figure over the past year.
However, the data correlates with the macro-picture in that January and February were lean months for the sector with export levels down for fashion and textiles goods. Much of this fall has been down to textile and leather export performance which has suffered over the year.
Whether the picture of poor export performance in April filters down into fashion and textiles goods will be interesting to see and its implications for on-going strategies within the Chinese market.
Figure 1: Monthly UK fashion and textiles goods exports to China.Source: HMRC (Based on SITC 61, 65, 84 and 85)