Chinese Textile Enterprises Accelerate Overseas Layout

In recent years, domestic spinning orders have been pferred to Southeast Asia.

Foreign buyers also favor manufacturers in Southeast Asia.

How to make use of the advantages of Southeast Asian demographic dividend, zero tariff and policy to carry out global resource allocation is an important measure for Chinese textile enterprises to "go out" successfully.

With the continuous expansion of production scale and demand for cotton in Southeast Asia, Bangladesh, Indonesia and Vietnam will become the three largest cotton importers in China in 2015/16.

Bangladesh's imports are expected to be close to 1 million tons, and Indonesia's imports are expected to be 800 thousand tons, up 4% over the same period last year. Vietnam's imports are expected to be 927 thousand tons, up 6% over the same period last year.

According to the current development rate, the import volume of the three countries will reach million tonnes, and the gap between China and the world's imports will be greatly reduced, and the proportion of the world's cotton trade will continue to expand.

According to ICAC forecasts, US cotton exports in are projected to be 2 million 300 thousand tons, and India's cotton export volume is expected to increase from 1 million tons to 1 million 200 thousand tons.

The reason why US cotton exports continue to be stable in terms of domestic production is expected to decrease significantly and China's imports are difficult to increase is that the import demand of Southeast Asian countries will continue to expand.

While India's exports have maintained growth in the face of weak demand in China, they also benefit from the development of textile industry in neighboring countries.

The trend of China's textile export orders to Southeast Asia is obvious.

In May 4th this year, when the 117th China Import and Export Fair closed, a number of textile and garment exhibitors said that the turnover was not satisfactory and orders were reduced. The trend of textile and garment industry pferring to Southeast Asia and other regions was increasingly obvious.

A person in charge of a textile and garment export enterprise in Hangzhou reflects: "Southeast Asian workers earn a monthly salary of 200~300 dollars, while our workers earn about 500~600 dollars a month, and customers are speeding up the pfer of orders to Southeast Asia."

A number of company executives said that compared with China, customers are more willing to place orders in factories in Southeast Asia.

Setting up a branch factory has become an initiative for them to attract business.

I believe this is also a trend for domestic textile mills in the future.

Stakeholders pointed out that Vietnam's garment exports accelerated to a certain extent, thanks to the negotiations on the free trade agreement of the country, such as TPP, Vietnam and the European Union, as well as Vietnam and Belarus, Kazakh and Russia customs union, to further enhance the competitiveness of Vietnamese textile and clothing.

As the middle and low-grade textiles and clothing accelerate the pfer of Southeast Asia, and domestic labor costs continue to rise, the Pearl River Delta and other areas have been in trouble or even shut down factories.

Other inherent advantages

In Southeast Asia, Chinese people have a wide distribution and high density, and many countries are greatly influenced by Chinese traditional culture. Brand influence and market expansion are relatively easy, which is conducive to cultivating brand awareness.

Some Southeast Asian countries themselves have a certain foundation for the development of textile and garment industry. They have a certain foundation in the labor force protection and industrial chain coordination. The host government is more enthusiastic about foreign investment in its textile and garment industry, which is conducive to lowering the entry cost of China's textile and garment enterprises.

Comparatively speaking, Chinese textile and garment enterprises have higher technology and richer experience and have certain competitive advantages in Southeast Asian countries.

In the United States' strategy of "returning to the Asia Pacific", the support attitude towards Southeast Asia is very obvious. Besides providing assistance, it will also support economically. It will not initiate trade protection measures for its textile and clothing products originating in Southeast Asian countries in the short term, and Chinese enterprises can enter into a relatively stable development period.

Many domestic enterprises have achieved overseas layout.

In order to make full use of the cost advantages, tariff preferences and cotton price advantages of Southeast Asian countries to adapt to the changes in the purchasing strategy of importers, many Chinese enterprises have implemented successful capacity pfer and overseas layout.

Chinese textile enterprises are accelerating their overseas layout. Tianhong and Yida group set up cotton textile bases and garment processing bases in Vietnam. Red beans and Shenzhou group set up export processing zones and garment processing bases in Kampuchea.