The Garment Industry Left Bangladesh &Nbsp; The Industry Appealed For Structural Adjustment Of Tax Rebates.

In China's traditional labor intensive industries -

Mr. Wang (the pseudonym), a garment manufacturer in Nanjing, said that China has 3-5 years of advantage.

"At this moment, such an adjustment is to support ourselves."

Mr. Li said.

How long can China's labor-intensive industries retain its competitive advantage under the pressure of RMB appreciation, rising raw material costs, labor shortage and international trade barriers?

Investigation - the rise of Southeast Asia

Mr. Wang of Nanjing returned from Southeast Asia's investigation. Bangladesh, Vietnam and Kampuchea walked down the road. He thought Bangladesh was a direction of "going out".

Mr. Wang is the boss of a garment processing factory. All of them are exported. The annual sales amount is 30 million -4000 million dollars.

In the second half of last year, the pressure of increasing costs and declining profits has been increasing.

He said: "after the financial crisis, we all realized that the current model could not last for a long time. We have been trying all kinds of changes.

After a year of domestic sales, I basically gave up now, and it's not very realistic to switch to other industries for a while, so I'll take a look at it. "

Mr. Wang believes that in terms of the clothing industry, China will still have 3-5 years to maintain its edge.

From Bangladesh, this sense of urgency has intensified.

"Our current strength is only in the two aspects of industry matching and delivery time."

"In other respects, Bangladesh has strong competitiveness," he said.

Mr. Wang talked about his feelings in Bangladesh.

First of all, the labor force. As we all know, for China's labor-intensive industries, it is experiencing double pressures of "labor shortage" and "Lewis turning point".

Bangladesh has a population of 160 million and has abundant labor force, and this country has only one leading industry of textile and clothing.

Because of the influence of British colonial rule, English in the country is more popular.

The price of labor is also very low. The government of Bangladesh stipulates that the minimum wage standard for textile enterprises is 1662 Taka, or about 180 yuan.

"That's why many people around me have moved to this country."

Mr. Wang said.

Secondly, in order to attract investment, Bangladesh is also implementing the preferential tax policy in the early stage of China's opening up.

Generally speaking, Bangladesh's income tax rate is 37.5%.

But for foreign investors, this tax can be granted for at least 5 years.

If we choose to invest in garment manufacturing enterprises in Bangladesh's export processing zones, we can avoid income tax for 10 years, and the out zone investment is 5 or 7 years respectively.

"Now the European and American countries, including Japan, are also intending to foster Southeast Asian countries," Mr. Wang said.

"China's textile exports to Japan, Canada and Australia and other markets, about 18% to 23% of import and export tariffs, and Bangladesh textile exporting countries enjoy zero tariff treatment."

He said, "from the above three points, we can see that if Chinese garment enterprises want to compete with Bangladesh similar enterprises or foreign textile enterprises in Bangladesh, the disadvantages are obvious."

According to statistics, Bangladesh's woven garments and knitted garments are mainly exported to the European Union, the United States and Japan.

The main export markets for Chinese textiles are the European Union, the United States and Japan, accounting for more than 40% of the total textile exports.

Obviously, Bangladesh's textile export market is similar to that of China.

"This means that if we move to Bangladesh, we can temporarily avoid domestic blind competition, labor shortage, quota gap and various trade barriers, so as to enhance profit margins."

Mr. Wang said.

Appeal for structural adjustment of tax rebate

"Bangladesh has now become the main competitor of China's garment manufacturing industry."

Mr. Li of Nanjing said that he was the chairman of an import and export company, and the main industry involved was clothing.

Since January 1, 2011, the EU has relaxed import rules, allowing Bangladesh garments (imported fabrics as raw materials) to enter the EU market without tariffs.

"This change will accelerate the shift of garment processing industry to Bangladesh."

Li said, "although the garment manufacturing industry is developing rapidly in this country, the raw materials of spinning depend heavily on imports."

According to Bangladesh garment manufacturers and Exporters Association, Bangladesh has more than 2 billion square meters of dyeing and finishing gap needs to be filled.

"This leaves much room for action for our dyeing and finishing enterprises."

Mr. Li said, "the state is always adjusting the structural tax rebate. At present, the most important thing in the textile and garment industry is the structural tax rebate adjustment."

He analyzed that the current tax rebate for clothing and fabrics is 16%. If the export tax rebates for clothing are raised and the tax rebate of fabrics is reduced, this will prompt domestic fabrics to increase their prices in the international market, especially in Bangladesh, which has already formed competition with China's garment making industry, but the cloth that still relies heavily on imports is developing in this industry.

"Otherwise, a few years later the situation will be that the larger polluting fabric industry will stay in our country, and the garment manufacturing will be pferred to Bangladesh in large quantities."

Mr. Li said, "even if the tax rebate for the fabric is lowered, foreign buyers will know the news and the domestic cloth manufacturers will not lose too much."

At present, Bangladesh textile industry is appealing to the government to amend the clothing tax to help exporters compete with overseas competitors.

Mr. Li said: "the structural adjustment of the tax rebate in the garment and textile industry has been put forward for two years by some of our garment manufacturers, but at the moment there is no response."

An official of the Ministry of Commerce said, "one of the characteristics of the export tax rebate adjustment in 2010 is that the commodities are mostly high energy consuming industries.

In the context of the current international reproduction rebalancing period and the rising labor prices, China's industrial restructuring and industrial upgrading are imminent.

The products that were cancelled last time basically belong to the areas that need to be eliminated and streamlined, or the products of basic raw materials and primary processing.

For the whole industry, this is already a reflection of the structural adjustment of tax rebates.

"No structural tax rebate adjustment in one industry has yet been considered."

He said.