Shen Qiaoqing: Chinese Textile Enterprises Go To Vietnam To Build Factories, TPP Should Fully Investigate The Market.

　　 Tianhong textile It was a relatively early Chinese investment company in Vietnam. It started a factory there in 2006, and then opened second enterprises. For Tianhong, Vietnam is a garment processing plant, which has abundant low-cost labor and a quota free policy to purchase cotton in the United States. The production of cotton yarn in Vietnam is much cheaper than in China. Today, TPP negotiations have become one of the hot topics in the textile industry recently, and many textile companies that have not yet moved their factories to Vietnam are ready to move. What is the difficulty of enterprises going to Vietnam to build factories? Where is the temptation of TPP? Recently, reporters interviewed Shen Qiaoqing, personnel administration manager of Changzhou Tianhong Textile Co., Ltd. on these issues.

　 Chinese textile enterprises enter Vietnam to welcome TPP

Reporter: from the newly released customs statistics, it is easy to see that in 2013 Vietnam imported a lot of raw materials needed for textile and garment processing from China. In January this year, Vietnam's exports to the United States and other countries had a substantial increase in the number of fabrics and garments. What do you think?

Shen Qiaoqing: from the overall perspective, Vietnam. Quality of workers Relatively high, the cost is relatively low, suitable for the development of garment processing industry. Comparing the textile industry (production of cotton yarn, fabric, non garment products) with the clothing industry, the former has higher requirements for investment and technology. Because of this, Vietnam's garment processing industry has relatively strong development level and scale, while the textile industry is relatively weak. In terms of raw materials, the climatic conditions for cotton planting in Vietnam are not very good, mainly due to excessive rainfall. Therefore, Vietnam usually purchases cotton instead of cotton. In terms of technology, Vietnam's local fabric production can not meet the needs of garment processing, so a considerable part of the fabric needed for garment processing depends on imports.

Vietnam has been one of the world's largest importers of fabrics and the largest exporter of clothing in recent years, forming a typical "processing plant" mode, which is very similar to that of Zhuhai, Guangzhou, 10 years ago. Textile and clothing are the pillar export products of Vietnam. The main export markets are the United States, the European Union and Japan, and gradually develop to other markets. This export pattern is basically similar to that of China, but the technology, management level and scale of development are inferior to that of China.

　 Reporter: Why did the company choose to build factories in Vietnam? What is the profit of Vietnam's factories?

　　 Shen Qiao Qing Today, China's yarn market is facing challenges such as rising costs and insufficient demand. After weighing, the company has focused its development on Vietnam, because in addition to cheaper wages than China, there is another key point: the United States cotton is used for making cotton yarn, and no quota is needed for exports to Vietnam by US cotton. Because of a series of cost advantages, the production of cotton yarn in Vietnam is 3000 yuan more than ~4000 yuan per ton in China. Shipping from Vietnam to produce cotton yarn to other countries like China is also quite cheap. Another key factor for the company to see Vietnam is that the output of Vietnam can enjoy the preferential policies of the US supported trans Pacific Partnership Agreement (TPP), which can be exported to the relevant TPP member countries, including Japan. In addition, Vietnam's water tariff is cheaper than that of China. Vietnam's electricity tariff is 2 times cheaper than that of China. Vietnam's law and order is also very good. They are also learning and imitating China's legal policies.

The factory in Vietnam mainly produces cotton yarn, which mainly meets local demand in Vietnam and exports to countries like China and Turkey. Vietnam's production capacity now accounts for nearly 1/3 of the company's total (production capacity). It is already the most profitable Affiliated Companies in the whole company. In addition to Vietnam, the company's future development priorities are also ready to develop in Turkey.

　 Reporter: you mentioned the TPP agreement, how does the company look at TPP? Are you going to make ready-made fabrics in Vietnam?

Shen Qiaoqing: if Vietnam's "trans Pacific Partnership Agreement" is signed, the tariff rate will be greatly reduced in the market of member countries of the country's clothing and textile exports, and the market of Vietnam's textile export member countries will receive zero tariff treatment, especially in the United States, the textile tariff rate will be gradually reduced from the current 17%~32% to zero. If the factory is not located in Vietnam and located in China, the products exported to the United States will be subject to high tariffs, and TPP will be zero tariff. There is no doubt that the signing of TPP will enable more and more Chinese textile enterprises to develop in Vietnam. However, TPP also has some problems, such as its failure to protect its products, and the cancellation of part of its subsidies.

The company is interested in producing ready-made fabrics in Vietnam and then exported to other countries. The company has been requisitioned 90 square kilometers of land in Vietnam to build Vietnam Tianhong Textile Industrial Park, which has high precision supply chain management system and wastewater treatment facilities, and hopes to transfer the production line to Chinese enterprises in Vietnam.

　 Make full market investigation before building a factory

Reporter: what problems have the company built in Vietnam? What are your suggestions for the factories that go to Vietnam?

Shen Qiaoqing: the investment policy of Vietnam and China is totally different. First of all, there are language problems. If there is no direct communication, it is difficult to bring up the staff, so translation is needed. Next is the individual matching problem, which requires the enterprise to have good planning, good execution and operation ability. Finally, there is a government level problem. The Vietnamese government is inefficient and official corruption is very serious. In the process of construction, basically every examination and approval must be handed in "red packets".

Chinese enterprises who go to Vietnam to set up factories should do a full market investigation before setting up factories, conduct comprehensive analysis and Research on the local political, economic and cultural environment, investment environment, foreign exchange policy, laws and regulations, market demand and potential, labor costs, purchasing power, and resource advantages, and conduct corresponding fieldwork, do a good job of feasibility demonstration, carefully choose the factory area and make a good factory building plan. In addition, if domestic enterprises want to go to Vietnam to build factories, they are advised to link up with more successful enterprises to understand how to find people in Vietnam and how to use them after going to Vietnam.

　　 Reporter: what is the employment situation of the company in Vietnam? What are the requirements when recruiting Vietnamese workers?

Shen Qiaoqing: I remember that 3 years ago, Vietnam's regulation was that a factory's overseas staff could not exceed 1%. Maybe now there has been a new adjustment, but the change should not be too great. In Vietnam, low end labor resources are abundant, but the high-end labor resources are seriously inadequate. Some jobs can only be employed by Chinese employees in Vietnam, such as general managers and financial personnel.

Compared with Vietnam, China has problems such as recruitment difficulties, serious personnel turnover and so on. The company's wage level for Vietnamese employees is relatively high in the same industry, which is about $250 a month, which is an advantage for the company to recruit workers in Vietnam. In addition, the company usually gives some benefits to Vietnamese employees and organizes some cultural activities of Sino Vietnamese enterprises, such as the Mid Autumn Festival Gala, and the company will distribute gifts for employees. The staff came home with gifts, and some friends and family members would come to the company to sign up for recruitment after seeing some friends and family members. In addition, the company will publish recruitment notices in newspapers and television. The company usually employs a one to one mode to recruit Vietnamese workers. Before that, a Vietnamese translator will be first available to facilitate the interview. The company's requirements for Vietnamese employees: junior high school or above, good physical condition.