Garment Industry Leaving Bangladesh Industry Appeals For Structural Adjustment Of Tax Rebate

In China's traditional labor intensive industries -

Mr. Wang (a pseudonym), a clothing manufacturer in Nanjing, said that China's advantage was 3-5 years ago. Mr. Li, who made garments exports, called on the state to carry out structural tax rebate reform in the textile and garment industry, that is, to raise the tax rebate for clothing.

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

Mr. Li said.

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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.