Affected By The International Situation, The Momentum Of Going Out Of Textile Enterprises Will Be Weakened.

With the deepening of reform and opening up and the expansion of external exchanges, China's overseas investment enterprises have spread all over the world, but overall, the distribution of Chinese enterprises across the broad leaf area is still relatively concentrated in the Asia Pacific Economic Region. Therefore, the deterioration of the economic situation in neighboring countries such as Vietnam is bound to affect the "going out" process of domestic enterprises.

Indeed, Vietnam's recent financial problems and its impact on the Asian economy have caused considerable shocks and debates in China's economic and business circles, and some overseas media are puzzled.

In fact, when they understand that 80% of Chinese investment projects are concentrated in the Asia Pacific region, it is not surprising that China is showing such sensitivity.

A few days ago, Sun Huaibin, a spokesman for the China Textile Industry Association and director of the Ministry of industry of the China Textile Industry Association, said in an interview with our reporter that influenced by the complicated financial environment in neighboring countries and regions such as Vietnam, the trend of "going out" of domestic knitting and textile enterprises will be weakened.

Textile enterprises mainly go to the Asia Pacific Region

A recent report from the Ministry of Commerce shows that the distribution of overseas investment enterprises is mainly dominated by neighboring developing countries and regions.

With the deepening of reform and opening up and the expansion of external exchanges, China's overseas investment enterprises have spread all over the world, but overall, the regional distribution of Chinese enterprises' pnational operation is still relatively concentrated in the Asia Pacific Economic Region, of which Asia attracts most domestic investment with its superior location and investment environment.

According to statistics, 80% of our investment projects are concentrated in Asia.

In terms of industrial structure, China's pnational investment still focuses on investment in processing, manufacturing and other primary products, mainly in small and medium-sized enterprises.

Especially in recent years, due to the changes in the international trade environment and the gradual loss of the comparative advantage of domestic manufacturing industry, China's textile enterprises have stepped up the pace of going abroad. Currently, there are nearly 1000 Chinese textile enterprises investing in factories in Vietnam and Kampuchea, and there are more than 100 investment in Bangladesh.

These enterprises avoid trade barriers and reduce production costs by accelerating international layout and pnational resource allocation.

It is understood that these countries are not subject to quota restrictions on exports to Europe and the United States, and can enjoy MFN treatment.

At the same time, these countries have given considerable preferential space to foreign enterprises in terms of taxation policies, such as the 10 year income tax exemption for foreign textile enterprises in Bangladesh.

Jiangsu province's largest textile and garment processing trade item -- Xin Lan (Kampuchea) Garments Co., Ltd. was approved by the Ministry of Commerce in 2006. The investment entity of the overseas project, Jiangsu AB Refco Group Ltd, invested 16 million 500 thousand US dollars in equipment, raw materials and some foreign currency, and set up an overseas processing trade enterprise in Phnom Penh, Kampuchea, exporting raw materials to Kampuchea, and then selling it to the European and American markets.

According to the head of the AB group, the cost increase has made it difficult for the underprofit production enterprises to bear. Therefore, AB group will put some low value underwear into Kampuchea to solve the quota problem and avoid trade barriers.

In the interview, reporters learned that under the pressure of cost and trade friction, many knitting and textile and garment enterprises in the Yangtze River Delta and the Pearl River Delta began to set up factories in Vietnam and Bangladesh. Because Kampuchea and Bangladesh and other countries have relatively low labor force, this comparative advantage will remain for a long time.

"Going global" is also an industrial pfer.

Sun Huaibin made an analysis of the "going out" of Chinese textile enterprises. From the purpose, there are basically three situations for enterprises to go out: to respond to the call of the state and participate in cooperation between countries, which is a political task; to invest and build factories abroad, to change the origin of products, to avoid trade barriers, to seek international operations, to make use of international resources to make up for their own shortcomings, and to enhance their comparative advantages and competitiveness.

Seen from the form, there are mainly "going out" of industrial capital, "going out" of commercial capital and "going out" of scientific research and development.

Sun Huaibin believes that textile enterprises go abroad is a form of industrial pfer. The pfer of textile capacity is not only manifested in the pfer from east to west, from coastal to inland, but also in international heritage. The "going out" of domestic textile enterprises is actually a form of international industrial pfer.

In this process, there are different trends because of different types. Processing pfer is more towards Vietnam, Kampuchea, Laos and other developing countries such as Southeast Asia, Africa and Latin America, while commercial capital and R & D "go abroad" are more oriented towards developing countries and regions such as Europe and America.

Sun Huaibin said that with the deepening of opening up, China's economic ties with neighboring countries have become closer and interdependence has gradually deepened, and economic and technological cooperation with developed countries has been continuously strengthened.

From its own point of view, China's national economy and industrial development also urgently need to accelerate the "going out".

With the rapid economic growth, the overcapacity and structural contradictions of China's textile industry are prominent. Most products are oversupplied, and exports alone can easily induce trade frictions.

To invest and build factories overseas and diversify the origin, we can expand the international market space, reduce trade frictions and promote industrial restructuring.

Be alert to the financial risks of "going out"

"At present, there are financial problems in Vietnam and other Asian countries and regions, which deserve our vigilance. We should pay special attention to preventing local financial problems from affecting Chinese enterprises who invest in factories."

Sun Huaibin, who visited Kampuchea, Vietnam and other countries, thinks so.

He told reporters that Vietnam's economic crisis is growing with certain background.

In recent years, Vietnam's reform and opening up speed has been accelerating, but its economy is heavily dependent on foreign capital. In this way, under the worsening global financial environment, imported inflation has exacerbated its domestic economic fragility.

It is understood that at present, China's knitting and textile enterprises in Vietnam mostly hold two attitudes: first, the divestment, and the two is wait-and-see.

Sun Huaibin said that the great depreciation of the Vietnamese shield has sounded the alarm for enterprises. In the coming period, the difficulties and risks faced by domestic enterprises in implementing the "going global" strategy will be further increased.

While we are going out, we must see that China's strength lies not in its abundant labor resources, but because it still has no developed domestic market.

"Therefore, if we want to effectively raise the level of opening up to the outside world and truly become a strong country in the world economy and trade, we must have a number of headquarters based on domestic multinationals."

Sun Huaibin said that implementing the strategy of "going global" is an important way to develop and expand itself, and also an objective requirement to ease the imbalance of the world economic structure and the distortion of global resources allocation.

The main purpose and way of "going global" is not the output of large capital and labor force, because China is not strong enough to export capital in large scale.

At present, the domestic knitting and textile enterprises "go out" is still in the initial stage. Sun Huaibin suggests that enterprises should continue to develop at a high level, focusing on several things: directly facing the foreign market, using local talents, learning local advanced technology, utilizing the good technological research atmosphere and talent advantages of foreign countries, establishing technological R & D centers, studying advanced management and experience of large foreign companies, gradually establishing their own sales and service networks, developing international markets better, and jointly developing strategic resources on the basis of mutual benefit.

In this way, we should try our best to grasp our R & D technology, overseas sales channels and foreign strategic resources in a relatively short period of time, so as to optimize the export structure of our products, break through the barriers of intellectual property rights, and improve the competitiveness of Chinese enterprises in the division of labor in the international industry.

Sun Huaibin finally stressed that, despite the adverse effects of the current international economic situation, the momentum of "going out" of domestic knitting and textile enterprises will be weakened for some time, but it still can not stop the "firm going" step of Chinese enterprises.