Overseas Layout Of China'S Textile Industry Focuses On One Area And One Way.

In November 2018, Lu Tai Vietnam, a wholly owned subsidiary of the domestic yarn dyed leading enterprise, Lu Tai textile company, plans to invest in the establishment of the Xinzhou company, with a total investment of US $60 million.

The "one belt and one way" construction has injected new strong impetus to China's cooperation with the countries and regions along the line. The Chinese textile industry has seized the platform of cooperation and new opportunities built by the "one belt and one road" to find better overseas investment opportunities, and many leading enterprises such as Lu Tai textile have invested in the "along the way" countries and regions.

Xu Yingxin, the vice chairman of the China Textile Industry Federation and executive director of the China textile international capacity cooperation enterprise alliance, recently revealed in Shanghai's "one belt and one road" investment promotion conference, so far, the total investment of China's textile industry to the countries along the belt and road has accounted for more than 80% of the total global textile investment over the same period.

At present, China's textile industry has entered a new stage of pnational layout, and overseas investment is accelerating in many regions, industries and forms.

At the same time, the strategic goal of the pnational resources allocation of textile industry is to achieve the global integration of the industrial chain and the global breakthrough of the value chain through "going out".

This is the view expressed by Xu Yingxin at the Textile Forum of Pakistan Investment Forum held in 2018.

According to Xu Yingxin, at present, China's textile industry overseas investment mainly presents "two main lines" and "three characteristics".

A main line is to take the industrial capital of China as the leading factor, and carry out the pnational layout of productive forces through greenbelt investment and cooperation, and create the manufacturing base layout pattern of "China plus neighboring countries" (with emphasis on Southeast Asia and South Asia), and maintain and enhance the international leading edge of China's textile industry in the global supply chain.

Another main line is that China's textile industry capital is controlled globally through active overseas direct investment and mergers and acquisitions, and raw material resources, R & D resources, brand resources and market channel resources at the two ends of the industrial chain.

The three characteristics are manifested in cotton spinning and knitting industry becoming the focus of overseas greenbelt investment.

Because domestic cotton prices are higher than international cotton prices, domestic cotton spinning enterprises are investing overseas in a large scale.

At the same time, due to the labor intensive characteristics of sewing links, knitted garment processing is also a hot industry for Chinese textile industry to invest abroad.

Two, cross-border mergers and acquisitions of upstream raw materials and brand technology are increasing.

The three is to "go out" and integrate closely with the Chinese market.

The "going out" of China's textile industry is based on the healthy development of domestic business.

Xu Yingxin also said that at present, Chinese enterprises have set up more than 100 enterprises and enterprises in textile and clothing production, trade and product design overseas, and the overseas investment of China's textile industry covers almost the entire textile and garment industry chain.

The layout of overseas productivity of Chinese textile industry shows the pattern of "mainland China + ASEAN + Africa".

According to the statistics of the Ministry of Commerce, China's foreign direct investment in textile industry totaled 9 billion 796 million US dollars in 2003~2018, with an average annual growth rate of 15.6%, accounting for 5.2% of the total foreign direct investment of manufacturing industry.

In the countries and regions along the "one area and one road", China and the ASEAN region have the best cooperation situation, and the proportion of China's foreign direct investment and import and export trade is increasing continuously.

ASEAN accounts for more than 80% of China's foreign direct investment.

ASEAN is also China's largest export destination and largest source of imports along the "one belt along the way", accounting for more than 30% of the total trade volume of the countries along the border.

The textile industry is a leading industry for China to actively promote the "one belt and one way" construction. It is also the preferred livelihood industry for promoting industrial development, creating national wealth and providing a large number of jobs along the "one belt and one line" countries and regions.

ASEAN is an important partner in the construction of "one belt and one way", and also a key area of China's textile international capacity cooperation.

As China and ASEAN countries have a deeper origin in history and culture, the convenience of location and pportation facilitates ASEAN to achieve natural industrial convergence with China.

In recent years, many textile enterprises in China have invested in factories in ASEAN countries, promoting the internationalization of China's textile industry and strengthening the landing and implementation of the international capacity cooperation project of textile industry.

Xu Yingxin analyzed that global trade policy reform is profoundly affecting the reshaping of the global textile supply chain.

In the China ASEAN Free Trade Area, due to the majority of products' two-way zero tariffs, it has speeded up the shift of China's cotton spinning and garment production capacity to Vietnam and other countries. On the other hand, it also promoted the export growth of China's domestic accessories to ASEAN countries, and made the ASEAN region surpass Japan as China's third largest export market.

The Chinese and ASEAN textile and apparel industry chains are undergoing deep integration.

In recent years, China's textile industry has also stepped up its pace of layout in Africa.

With its advantages in resources, labor, policies and consumption potential, Africa has become a key area for overseas layout of Chinese textile enterprises.

Insiders pointed out that the comparative advantages of Africa's development of the textile industry are obvious.

First of all, Africa has a large number of young labor force, and the price is low.

Second, some African countries have advantages in energy and raw materials.

Thirdly, Africa has an external trade environment for European and American preferential market access.

Finally, in recent years, the preferential incentive policies adopted by African countries have continued to create a favorable business environment, while Africa has huge consumer market potential.

Mohammed Kasenm, chairman of the Egyptian Federation of industry and foreign trade committee, recently participated in the "one belt" investment promotion conference jointly organized by the International Trade Office of China Textile Industry Federation and China textile international capacity cooperation enterprise alliance.

Kasenm said at the conference that Egypt's textile industry ranks among the highest in African countries.

More importantly, Egypt's domestic textile industry chain is relatively complete, from cotton cultivation to spinning, weaving and garment manufacturing can be achieved, which makes Egypt have a strong ability in the field of garment manufacturing.

At the same time, Egypt has many investment highlights, such as the political environment conducive to maintaining a sustainable system of ecosystems and ensuring long-term and stable economic growth. Large and diversified economies can resist internal and external shocks and are supported by young and dynamic populations.

In addition, the government is committed to the continuous reform of the society, adopting active fiscal and monetary policies, and revising the new investment law to improve the investment environment.

These undoubtedly provide macroeconomic support for Egyptian economic growth.

Kasenm suggested that Chinese enterprises can invest in Egypt for investment in Egypt, while Minya Industrial Park is suitable for investment in textile industry.

Apart from its advantageous geographical location, the most unique advantage of the Minya Industrial Park is tax exemption. Because the park is invested by the government, the government guarantees that the enterprises that enter it will be exempt from various taxes such as business tax and income tax.

In addition, raw materials such as imported textile machinery, textile surface accessories and other textile materials imported from Minya industrial park can also be exempted from customs duties.

According to Kasenm, at present, the construction of Minya Industrial Park is in progress, and it is expected that by the end of 2020, the park will be open to investors.

He hopes that Chinese textile enterprises will invest in factories in Minya Industrial Park.