Raw Materials Skyrocketed &Nbsp; Guan Enterprises Borrowed Profits From Taiwan To Find Profits.

ECFA landing, one stone strikes thousands of waves. There are huge business opportunities behind ECFA, including the early checklist for mutual tax exemption on both sides of the Strait, which is the key to ECFA.

16%, 21% - that is the import duty that shirts and plastic buttons need to pay before entering the mainland market from Taiwan.

After the implementation of the ECFA, the import tariffs fell to zero within two years, and the discount rate was not large.

This newspaper will interpret the business opportunities in the ECFA early collection list from the main categories of tariff reduction, such as textile products, agricultural products, petrochemical products, mechanical products, pportation tools, etc.

Please note.

Core tips

Textile products have become the most beneficial category of Taiwan's entry into mainland products.

There are up to 136 items of tariff relief products.

The mainland agrees that Taiwan's textile products exported to the mainland include 136 upstream and downstream textile, textile and footwear products.

According to the current list, 60% is the biggest benefit for cloth, followed by yarn products, accounting for 30%.

Some Hong Kong businessmen said that Dongguan textile and garment enterprises are in a difficult time due to the rising pressure of raw materials.

Taking wool as an example, the price in June this year increased by 12% compared with the same period last year.

"If we continue to be subject to rising prices of raw materials, profits will continue to be squeezed, or we will consider starting from Taiwan to find more room for cooperation."

The highest tariff rate for textile category is 21%.

The two sides signed the economic cooperation agreement (ECFA) on June 29th, and the textile industry took the first batch of early checklist trains.

It can be seen from the list that the mainland agrees to reduce the tax in Taiwan. The textile products category has become the most beneficial category, with up to 136 items of tariff relief products.

Followed by mechanical products and other products.

A customs official in Whampoa Customs said that the mainland customs is implementing the MFN rate for importing Taiwan textiles.

Among them, nylon import duty is 5%-10%, synthetic fiber cloth 10%, button 15%-21% (plastic button 21%, metal button 15%), shoes and boots parts 15%.

After the formal implementation of the ECFA, it will mean that the cloth yarn products will enter the mainland from Taiwan, and will drop to 0 from nearly 10 percentage points in the past two years. The highest decline will be 21% of plastic buttons.

The reporter calculated an account, assuming that A enterprises import cotton cloth 10 million yuan per year from Taiwan, and the rate of ECFA impact from 10% to 0 will save 1 million yuan directly for enterprises.

Rising raw materials or making enterprises involved in Taiwan business

Dongguan Ying Qi Industrial Co., Ltd. is a large knitting company under Hongkong Maoming group. It is mainly engaged in knitted garment business. Its products are exported to Europe and the United States and around the world 90%.

Ying Qi, director of computer loom division, said Li Yuede did not import textile and clothing raw materials from Taiwan before.

"Generally import textile machinery and equipment, textile raw materials from Japan and Germany, and the above raw materials and equipment are normally shipped to Dongguan after the pfer of Hongkong."

Li Yuede said that after the ECFA was signed, the cost of raw materials in the upstream of textiles imported from Taiwan would be reduced. Ying Qi would consider working with Taiwan suppliers to reduce costs.

"Ying Qi is a Hong Kong funded enterprise mainly based on European and American clients. I think if the price of raw materials continues to rise and profits continue to be squeezed, the top executives of Maoming group will also consider starting from Taiwan to find more room for cooperation."

Li Yuede disclosed that due to the pressure of raw materials rising, Dongguan textile and garment enterprises are in a difficult period.

Take Ying Qi as an example, raw materials such as wool are rising at the moment. The price in June this year increased by 12% compared with the same period last year, while the customers of large orders did not raise the price. The company recently faced the pressure of rising wages of workers.

"At present, Dongguan's textile and garment enterprises are having a hard time and are in a hard time."

Cost reduction of technological upgrading of textile and garment enterprises

Wang Tiancai, executive vice president of the Taiwan Businessmen Association, said, "before textile machinery and equipment have more than a percentage point of import tariffs, the future relief will bring some convenience to the textile and garment enterprises' technological upgrading."

Wang Tiancai believes that after zero tariff, Taiwan underwear, socks and other textile products will not cause damage to mainland manufacturers after they enter the mainland.

Because many textile manufacturers in Taiwan have already come to Dongguan, instead, they will export more to Taiwan. Taiwan is better at the production of bamboo charcoal nano socks and underwear than mainland China, which may cause some impact on some manufacturers in the mainland.

As for the upstream and downstream textile products of the mainland, Taiwan will be allowed to enter Taiwan with zero tariff. This is a blow to Taiwan manufacturers.

"In terms of production of cotton yarn, cotton fabric, rayon yarn, knitted fabric, nylon and PU synthetic leather, the mainland has more advantages than Taiwan.

It will cause a great blow to the textile manufacturers in the middle and lower reaches of Taiwan. "

The early harvest list of ECFA (Cross Strait Economic Cooperation Framework Agreement), the mainland agreed to open 539 tax cuts to Taiwan, including 136 items of textile products to Taiwan.

The current import tariffs of some of the textile products announced are as follows:

Whether the zero tariff is the key to reducing the cost depends on the customers.

The business of St. flag Road fashion is mainly concentrated in the European and American markets. This agreement has no direct impact on us now.

However, if the company falls to zero tariffs and the company is profitable, it will consider developing Taiwan's business.

As for whether the zero tariff really reduces the cost of the enterprise, it depends on the customer. If the customer checks the product cost, it will lose the preferential tariff. Then the zero tariff will not help the profits of the enterprise.

Asian Footwear Association Secretary General Li Peng

Tariff reduction has reduced production costs at least.

Tariff reduction will certainly help enterprises, at least production costs will come down.

At present, the import of textile raw materials from Taiwan is relatively small.

First, the textile raw materials manufacturers in the Yangtze River Delta area have done very well. Many mainland enterprises have chosen to purchase in the above areas; two, Taiwan manufacturers consider the cost issue, generally choose to set up factories in the mainland, even if local businesses have business contacts with Taiwanese manufacturers, they will usually be completed in the mainland.

The same is true of shoe making raw materials.

Generally speaking, leather materials are imported from countries such as Italy, Spain, Portugal and so on. There are not many raw materials imported from Taiwan.

The production cost will be lowered, or a new procurement channel option will be provided for the Dong garment and textile manufacturer.

{page_break}

Expert viewpoint

Combining their advantages can help the textile industry grow stronger.

Professor Guo Yan, Department of international trade, Beijing Institute Of Fashion Technology

Combining their advantages can help the textile industry grow stronger.

Mainland and Taiwan cities, including Dongguan, have strong raw material manufacturing capabilities, while Taiwan's design market is mature.

The combination of these two will bring an opportunity to strengthen the textile industry.

In ASEAN countries, textile and garment exports such as Thailand and Vietnam have increased rapidly in recent years, which has a certain impact on China's textile exports.

After the signing of ECFA, China's textile enterprises will be more convenient to go out, and it is a good thing to enhance the competitiveness of the industry.

Textile products tax reduction

The mainland agrees to make a list of textile products for tax reduction in Taiwan (136 items).

(1) middle and upper reaches of textile industry: cotton yarn, cotton fabric, cotton and chemical fiber blended fabric, cotton blended fabric, synthetic cotton fabric, regenerated fiber cloth, synthetic fiber cloth, synthetic fiber yarn, synthetic fiber cotton, synthetic fiber cotton yarn, regenerated fiber cotton yarn, synthetic fiber cotton shuttle fabric, regenerated fiber cotton, synthetic fiber cotton shuttle fabric, etc.

(2) textile downstream: special textiles, knitwear, buttons, wipes, other fabrics and nonwoven fabrics.

(3) textile products: bags, shirts and pullovers, swimsuits, socks, underwear and towels.

(4) footwear: outsole, rubber or plastic sole and heel.

Taiwan agrees to produce early list of textile products for tax reduction on the mainland (22 items)

(1) middle and upper reaches of textile industry: cotton yarn, cotton fabric, synthetic fiber yarn, and synthesis.

(2) textile downstream: nonwoven fabrics, knitted fabrics, nylon, PU synthetic leather and other fabrics.

Extended reading

Dongguan imported from Taiwan in May

Textile and apparel increased by 21.4% over the same period last year.

The data provided by the Dongguan Municipal Administration of foreign trade and economic cooperation show that at present, there are 1720 textile and garment enterprises in the background of foreign capital.

In fact, apart from the ECFA factor, many Dongguan funded enterprises and Taiwan funded enterprises in Taiwan are growing in import and garment textile materials.

In January -5 textile and apparel exports in January this year, 1 billion 770 million US dollars, an increase of 22.9% over the same period, of which exports to Taiwan were US $12 million 420 thousand, an increase of 4.58% over the same period last year, and imports from Hong Kong, US $170 million, up 21.4% over the same period last year.

In terms of individual enterprises, the famous garment Foundry Enterprise -- Dongguan Luen Tai