African Industrial Park, China Leather Enterprises Gather Together

About 120 kilometers from the Egyptian capital of Cairo to the East, a mirage industrial cluster has appeared in the vast desert. This is the Suez Bay Northwest Economic Zone of Suez, Egypt. The Chinese government set up an overseas economic and trade cooperation zone in Egypt. The cooperative zone is close to the Suez canal and is located in the Golden Triangle zone connecting the three continents of Asia and Europe. It is the key geographical traffic center in the world and the main trade center of the world. It is one of the faster progress in the seven foreign trade and economic cooperation zones established by China in Africa. In an interview with reporters, it was learned that the Suez economic and trade cooperation zone, which was officially unveiled during the 10 session of the non forum in Egypt in 2009, has become an important window for Chinese enterprises to invest in the African cluster effect. With the acceleration of the development of Suez economic and trade cooperation zone and the crack of crackling, some Egyptian workers are producing stainless steel knives and forks with machine tools in the workshop of Tianjin long gold stainless steel company in the initial stage of Suez economic and trade cooperation zone. The owner of Tianjin dialect told reporters that the company has recently successfully completed the transformation to the production of high-grade stainless steel tableware. The main target market is the local market in Egypt, and now it has taken a certain market share. In the factory of Tianjin white rose garment factory, the Egyptian women workers dressed in traditional Muslim costumes are working on the fabric. The company is one of the first batch of Companies in the cooperative area, and almost all its garments are exported to Europe and the United States. "Although the orders have been reduced by the financial crisis, the company has just pulled new orders recently, and our production is booming." The company official said. In July 2008, Tianjin TEDA, a joint-venture and absolute holding company of Teda Investment Holding Co and the founder of the Suez, formally took over the development and construction of the five square kilometers of Suez economic and trade cooperation zone. In just a few months, it has made the starting area of one square kilometers of the economic and trade cooperation zone change rapidly. The construction of overseas economic and trade cooperation zone is a key work initiated by the Ministry of Commerce in 2006. It is usually located in countries with low factor cost and abundant resources, which are developed by enterprises and attract Chinese enterprises to invest. The popular point is China's overseas development zones or industrial parks. Due to the obvious effect of large-scale Chinese invested enterprises on host country's employment and economic development, and the host country's welcome and attention, China is also relatively easy to win preferential policies. In addition, the economic and trade cooperation zone provides a good business environment for overseas Chinese funded enterprises. The concentrating of similar products in the park is conducive to the formation of a good competition order. At the same time, the upstream and downstream industry chain is complete, Chinese enterprises are also able to find and utilize business opportunities, and even form industrial agglomeration effect. The official of the Ministry of Commerce told reporters that at present, the Chinese government has approved 19 national level foreign economic and trade cooperation zones. The Egyptian Suez economic and trade cooperation zone is the second batch of approved national level foreign economic and trade cooperation zone, and the only one state level economic and trade cooperation zone in the Middle East. Not only that, but the special care of the senior leaders of the two countries has made the Suez economic and trade cooperation zone of Egypt have the special significance of the national strategic commanding height. In 2006, at the Beijing summit of China Africa Cooperation Forum, in order to promote the development of new strategic partnership between China and Africa, the Chinese government announced that it would take 8 policy measures, including the commitment to establish 3 to 5 Foreign Economic and trade cooperation zones in African countries in the next 3 years. Under the promotion of the national strategy, the Ministry of Commerce and the Central African development fund listed the Suez economic and trade cooperation zone in Egypt as a key support project for China's overseas cooperation area. Egypt's Suez economic and trade cooperation zone has in fact become the test site and vane for Sino Egypt cooperation and Sino African cooperation, and the joint point of South South cooperation. In the conference room of TEDA office building, reporters interviewed Liu Aimin, general manager of Egypt TEDA Investment Company. Outside the window, a factory building and a construction project were standing in the yellow sand of the eastern desert of Egypt. "Making overseas development zones for Chinese enterprises is much more difficult than in China, but with the east wind policy, we are making rapid progress in this project." Liu Aimin said that TEDA had started building a comprehensive service area of 100 thousand square meters on the basis of the construction of the Cooperative Zone Road, power supply and water supply infrastructure and some industrial plants and office space. In 2009, the standard factory building of 30 thousand square meters and the comprehensive supporting service facilities of 30 thousand square meters could be delivered. Before August this year, the occupancy rate of around 60% can be achieved. Next, Taida plans to introduce Chinese shipping and Chinese banks into office buildings to facilitate customs clearance and logistics. Two ways to choose a Chinese enterprise investment cooperation zone, many reporters came to the cooperative area specializing in the production of non-woven fabric spinning machine Egypt company, the workers are nervous production of specialized hospital supplies such as surgical clothing non-woven clothing. When asked about profits, the company chief executive said that because textile and garment enterprises could enjoy 12% of the export subsidy, profits could still be guaranteed under the financial crisis. "The company uses the industrial zone mode to register, so we can enjoy the above concessions." Liu Aimin said that Egypt has a stable domestic environment and free trade policies signed with most of the world's trading nations. In addition, the Suez economic and trade cooperation zone has given the choice of two investment models for industrial zones and free trade zones in a single region. The Egyptian government has preferential policies for each of the two modes of investment. Chinese enterprises can choose the product sales market for domestic or foreign markets in Egypt. These preferences attract more and more enterprises with "going abroad" investment intentions. According to AhmedAmin, vice chairman of the Egyptian free trade zone and GAFI, Egypt has signed several multilateral and bilateral trade agreements with the world's major economies such as the United States, the European Union, the Middle East and Africa. The export enterprises that invest in the Suez economic and trade cooperation zone can not only enjoy the policy of no sales tax, but also enjoy the preferential tariff agreement, and export to the United States, the European Union and the Arabia alliance are exempt from customs duties. Under this premise, Egypt also has an export subsidy policy for the four major industries of furniture, clothing, building materials and leather. If the textile enterprises in the industrial zone mode export to the United States, not only do they not compete for quotas or pay customs duties, they can also enjoy 12% of their export subsidies, while the free trade zone mode will enjoy 6% of the export subsidy. Long term registration of enterprises in the cooperative area can enjoy preferential treatment of customs bond cancellation, that is, the relevant departments in Egypt usually have to collect 10% of the customs duties and 30% of the sales tax as a deposit to freeze in the banks. If the credibility of the business increases year by year, the margin can be reduced, so that the occupation of the floating capital can be reduced. For example, the white rose garment company, which has invested in the cooperative zone, will only pay 25% of the customs duty as a deposit. For the general industrial enterprises, Egypt's average energy price is about half of that of China, and its labor cost is 20% to 30%. In addition to the various preferential measures to promote investment in Egypt, the Tianjin municipal government has also introduced four subsidy policies to attract Chinese enterprises to enter the Suez economic and trade cooperation zone. First, 5% of the actual investment is subsidized for three years in a row; second, the staff members subsidize ten thousand yuan per person for the first year; third, the enterprise personnel insurance subsidy is continuously supplemental three years, the maximum insured amount is 1 million yuan; fourth, the service enterprise water, electricity, gas, and rent are kept for three years. Enterprises invest in a project. The Tianjin municipal government will subsidize up to 10 million yuan a year. Dr.MahmondMohieldin, the Minister of investment in Egypt, said that in order to enhance the attractiveness of overseas investment, the Egyptian government has carried out a series of reforms in recent years to improve domestic business environment. "We are keen to strengthen exchanges and cooperation with Chinese enterprises and business circles, especially in the fields of urban infrastructure construction, logistics, electronics and communication technology, mining, building materials, textile, automobile spare parts and chemical industry," he said. Liu Aimin said that at present, TEDA combines the economic characteristics of China and Egypt and the overseas investment demand of Chinese domestic enterprises, and has made a long-term industrial planning for the starting area of a square kilometer in the cooperative area. The cooperative zone will be planned as a textile and garment industrial area, a commercial automobile industrial area, an oil equipment industrial area and an electrical and electrical industrial area. These four industries will face more preferential and more opportunities in Egypt. At present, some enterprises in these industries have become the "demonstration fields" to invest in Egypt. Reporters saw that the Ministry of petroleum and the Sichuan Honghua company invested 30 million US dollars in oil drilling equipment production projects, and produced 3 rig machines named after the Egyptian President Mubarak and put it into operation, with an annual output value of more than US $30 million. This project not only raised the level of the Egyptian petroleum machinery industry, but also filled the market gap in the Middle East and Africa. These "demonstration fields" enterprises are looking for opportunities in Egypt, but they are also faced with some difficulties at the same time. They say that the biggest obstacle to investing in Egypt is cultural differences, including the way of thinking and the inertia of work. Local workers are somewhat less punctual and less diligent. Basically, three local workers are equal to two workers in the country. Secondly, the local financing environment is not ideal, commercial banks lending rates 13% to 14%, deposit interest rates 7% to 10%, the stock market financing threshold is higher, financing channels and financing tools are limited. Therefore, Chinese enterprises should make good use of China Africa Investment Fund for financing. Third, although the infrastructure of the Suez economic and trade cooperation zone is already the best in Suez's Northwest Economic Zone, it is far from the domestic development zone. In this regard, AhmedZoheir, director of investor relations at GAFI, said that the government of Suez will gradually improve its infrastructure facilities, build new waterworks and power plants, and tilt the special economic zones of the northwest. AhmedAmin, vice chairman of GAFI, suggested that Chinese enterprises plan to invest in the Egyptian free trade zone and GAFI before they invest in Egypt. The free services provided by GAFI include: arranging foreign investors to communicate with Egyptian government and company leaders, dealing with investors' obstacles, seeking strategic partners of investors, etc., and providing a special contact person for each investor to facilitate services. Wang Xiaonan: editor in charge