Vietnam, Burma, Indonesia, Bangladesh, India, Which Country Is Strong In Clothing Investment And Construction?

This year is the 70th anniversary founding of new China. China's textile industry has established the most modern manufacturing system in the world.

Today, China's textile enterprises are responding to the national "one belt and one road" initiative, opening up the global layout.

According to the statistics of Ministry of Commerce, from 2003 to 2018, foreign direct investment in China's textile industry totaled US $9 billion 796 million, with an average annual growth rate of 15.6%, accounting for 5.2% of the total foreign direct investment of manufacturing industry.

In the countries along the line, the cooperation between China and ASEAN is the best, and its share in China's foreign direct investment and import and export trade has been increasing.

ASEAN accounts for more than 80% of China's foreign direct investment.

ASEAN is also China's largest export destination and largest source of imports along the belt, accounting for more than 30% of the total trade volume of the countries along the border.

Recently, the China Textile Import and export chamber held the 2019 seventh "International Forum on China and Asia textiles" in Shanghai.

At the meeting, the Burma Garment Manufacturers Association, Vietnam cotton and Textile Association, Bangladesh clothing manufacturers and Exporters Association, and the India Textile Association held a joint exchange on recent Asian investment and policy trends.

This is excerpt from the colleagues of textile and garment industry.

Myanmar

Labor force: Burma's current skilled workers, especially the skilled workers in the clothing industry, are in short supply.

The government has corresponding policies to help industry and investors recruit suitable workers or train skilled workers.

The Ministry of labour has launched a law on internal training for five years, but the effect is not very satisfactory.

Active adjustments are being made now, such as reducing the percentage of expenses borne by enterprises.

The government has also set up some training schools to conduct pilot projects in five regions, aiming at training workers and improving their professional skills and efficiency.

Moreover, semi-automatic machines such as advanced technology and equipment can greatly increase productivity and reduce dependence on manpower. Some factories that have already been put into operation can fully demonstrate this.

Logistics: domestic pportation is mainly trucking, and the cost is low. The price of shipping is relatively high. The railway will cover the whole country and the railway will be connected to China's railway network. Now, the final feasibility assessment is being carried out.

But at the same time, Burma enjoys preferential treatment of zero tariffs on exports to the European Union and other regions. Therefore, Burma's export to the European Union will be a great advantage, and it can further enhance the procurement in Burma.

Vietnam?

Policy direction: the Vietnamese government hopes that its industry will start from the textile and clothing industry. Through the practice of the past 20 years, it has proved that the policy accords with the development needs of Vietnam.

Now Vietnam's textile industry has made great progress and has become the largest industry, attracting about 3000000 of the employed population with a turnover of more than 40 billion dollars.

The government hopes to continue to strengthen and promote sustainable development in the field, enhance the country's economic strength and people's living standards.

Key areas of investment: fabric and printing and dyeing.

At present, Vietnam's textile and garment industry is unable to support itself because of its fabric, 75% of which is CMT (feed processing).

The government hopes to further develop fabric production and upgrade the industry from CMT to OEM and ODM.

Vietnam now relies heavily on imports from China, and the government hopes to adjust and change this.

Nam Dinh textile and garment industry in northern Vietnam has a good foundation, and the printing and dyeing industry also has a good development.

The government intends to build the province into a garment production center in northern Vietnam. It has set up two industrial parks, one is already full of gardens, and another 2100 hectares of industrial parks can still be invested. It is estimated that 3 billion meters of fabric will be produced here.

Labor force: with the rapid development of various industries, there are labor shortages in many industries in Vietnam.

Other industries, such as the electronics industry, are scramble for labour with the textile and garment industry.

In Vietnam, the distribution of textile and garment industry is also uneven.

When Vietnam just opened its investment, many investors chose the south rather than the north because the South was more open and the environment better.

But as time goes by, a lot of resources are consumed, such as human resources, so in the south, resources are scarce, there is not enough labor force, and there is not much infrastructure support.

Therefore, over the past ten years, the Vietnamese government has vigorously built northern Vietnam to invest in infrastructure such as power, roads and airports.

Now the conditions in the North may be better than in the south.

Investors may consider investing in the north, where there are better policies and more manpower.

This may be a short-term solution.

In the long run, the government also encourages investors to carry out vocational training, and the government will provide financial support from government funds.

Bengal

Industry Profile: in 2016 and 2017, Bangladesh textile and garment industry continued negative growth or no growth.

In 2018, thanks to the Sino US trade friction, Meng Congzhong benefited and achieved a 40% growth.

Export clothing is US $33 billion.

Bangladesh is currently the world's second largest exporter of clothing, but the export strength of yarns and fabrics remains to be improved.

Key areas of investment: Bangladesh's immature chemical industry as a support, the production of man-made fibers is more difficult.

The government hopes to invest more factories producing man-made fibres.

Environmental protection: Bangladesh textile and garment industry is concerned about environmental protection, hoping to achieve sustainable development of industry.

There are 83 green factories in Bangladesh and only 40 in China.

7 of the top 10 best performing factories in the world have invested in Bangladesh.

European buyers prefer Bangladesh to American buyers.

Labor force: Bangladesh is rich in human resources, and is still in the demographic dividend period. 72% of the population is under 40 years old, and 64% of the population is under 30 years old.

But the lack of skilled workers leads to low productivity.

The government has set up a fashion textile university to give more people the chance to receive professional skills and fashion training.

India

Policy direction: India is not only an important exporter of textiles and clothing, but also an important consumer market.

India is also facing the problem of labor shortage, especially skilled workers, but the government attaches great importance to the training of labour force.

Infrastructure construction in India has been continuously improving, and there are more than more than 40 kilometers of new roads every day.

The government has also given full attention to the textile and garment industry, and can enjoy preferential policies such as tax cuts and lower loan interest rates.

The textile industry is China's leading industry to actively promote the "one belt and one way" construction. It is also the preferred livelihood industry for promoting industrial development, creating national wealth and providing a large number of jobs along the "belt and road" countries and regions.

ASEAN is an important partner of "one belt and one way", and also a key area of China's textile international capacity cooperation.

As China and ASEAN have a deeper origin in history and culture, the convenience of location and pportation facilitates ASEAN to achieve natural industrial convergence with China.

In recent years, many textile enterprises in China have invested in factories in ASEAN countries, thus promoting the internationalization of China's textile industry and strengthening the landing and implementation of the international capacity cooperation project of textile industry.

According to statistics, in 2017, China's textile and garment industry invested 655 million US dollars in ASEAN.

Many enterprises in China are eager to try out the enterprises that have gone out first, but domestic enterprises often lack experience in overseas investment, and to a certain extent, increase the risk of overseas layout.

Singapore victory group is a multinational company with Temasek Holdings, an internationally famous company. It has established industrial parks in many ASEAN countries. Its perfect infrastructure and one-stop babysitter customer service have impressed and acclaimed the research and entry enterprises.

A few days ago, Shen Huimin, vice-president of Sheng Ke group, participated in the "one way" investment promotion conference jointly organized by the China Textile Industry Federation International Trade Office, the China textile international capacity cooperation enterprise alliance and the China International Trade Promotion Committee's Textile Industry Association. In Shanghai, the business of Sheng Ke group, the industrial parks of Vietnam and Indonesia and the investment characteristics of the two countries' textile and garment industry were introduced to our textile and garment enterprises.

Factors to consider overseas investment

"There are many problems to consider when deciding an overseas investment destination and choosing an industrial park."

Shen Huimin said, from the inside, we need to consider the infrastructure construction, including water, electricity, steam, drainage, communications, as well as technology, talent, information, capital, market, regulations, labor, customs, logistics and other supporting services.

From the periphery, we should also consider establishing good relations with the local government.

These factors determine whether it can be quickly put into operation, stable operation and good production environment.

The overseas investment of enterprises needs the help of a powerful industrial park manager. Sheng Ke group has rich experience in the operation of industrial parks. It operates many industrial parks in China and Southeast Asia.

Hongkong Yida, Jiangsu Dong Du and other famous textile enterprises have entered Vietnam through Sheng Ke group.

According to Shen Huimin, Sheng Ke group is controlled by Temasek, while Temasek is supervised by the Ministry of finance of Singapore. Therefore, Sheng Ke group also has a government background, and its operation project has also been supported by the government.

Sheng Ke group mainly engaged in energy, water, maritime and urban development business, including the development, operation and management of comprehensive urban projects, such as industrial parks, offices, business and residential.

Thanks to China's reform and opening up, Sheng Ke has successfully operated Suzhou Industrial Park, Nanjing eco technology island and Sichuan innovation science and Technology Park in China.

There are many projects in Vietnam, Indonesia and India.

With the support of the government, Sheng Ke will also set up an industrial park in Burma in 2020.

Vietnam has a free trade agreement with many other countries.

Many domestic textile enterprises have invested their investment in Vietnam. In Shen Huimin's view, the advantage of Vietnam's investment lies in the stable political and social environment, the strong economic growth, the diligent and cheap young labor force, the expansion of the domestic consumer market, and the realization of free trade between Vietnam and many other countries.

Data show that Vietnam's population is nearly 100 million, ranking fourteenth in the world, and the workforce below 43 years old is 65 million. It is one of the countries with the largest labor force in Southeast Asia, and the population presents a gold structure.

With the massive influx of foreign capital into Vietnam, the employment rate of Vietnam has been directly promoted. The property market, factories, department stores, construction climax and the consolidation of the Vietnamese government revenue have also contributed to the rapid economic growth of Vietnam, with the GDP growth rate of 7.1% in 2018.

In addition, low labor and manufacturing costs are undoubtedly a major advantage of Vietnam.

In recent years, although labor costs have risen at an annual rate of 11%, the average monthly salary of their production workers is only 40% of that of our workers.

So far, Vietnam has signed 16 free trade agreements (FTA) with other countries, especially with the European Union, Japan, Korea and other developed countries signed FTA.

The Vietnam and the European Union free trade agreement (EVFTA) signed by Vietnam and the EU is about to come into force.

According to the agreement, the EU will exempt Vietnam from exporting to 85.6% of the EU's tariffs, and will raise the tax to 99% in the next 7 years.

This will inject strong vitality into the export of Vietnam, especially the export of shoes and clothing.

Vietnam is also a country of the "p Pacific partner comprehensive progress agreement" (CPTPP), which has come into force.

The agreement will help promote Vietnam's exports to Asia, the Americas and Oceania, especially in Japan, Australia and Canada.

At present, the victory group has 7 projects in Vietnam, which are located in the strategic position of the southern, central and northern economic zones.

Among them, Haiyuan, Guang Yi and Yi an industrial parks have special preferences in tax revenue. Enterprises enjoy a business income tax rate of 10% within 15 years from the year of production and operation.

Enterprises that have been assigned to a generalized Industrial Park may be exempted from 5 years' customs duties when importing raw materials and semi-finished products that the local market is unable to meet.

Besides, the cost of water and electricity is also very low, which is especially suitable for the investment of textile enterprises.

In addition, the Vietnamese government has strict management of wastewater discharge from printing and dyeing enterprises, and the licensed enterprises are eligible for discharge.

The park managed by Sheng Ke can provide wastewater discharge permits for enterprises and provide comprehensive services such as import and export, technical schools and so on.

Shen Huimin suggested that textile enterprises should be selected in the generalized Industrial Park as the best choice.

Low labor cost in Indonesia

Sheng Ke also operates several industrial parks in Indonesia. Among them, the Kent Industrial Park in Semarang, Central Java province, is built by Indonesia's PTJababeka group and the two leading developers of Sheng Ke.

The total area of the large comprehensive industrial park is about 2700 hectares.

Kent Industrial Park is a comprehensive industrial park with international standards. It provides high-quality industrial, residential and commercial land for local and foreign investors interested in developing Indonesia to meet the increasing low operating costs of investors.

Kendall Industrial Park

Shen Huimin said that the price of land in Indonesia is higher than that in Vietnam, but the labor cost in Central Java is lower than that in Vietnam.

He believes that with competitive land prices, abundant technical labor resources and perfect infrastructure, Kendall Industrial Park is suitable for investment in textile enterprises.

"Textile enterprises enter the industrial park. They can concentrate on their own affairs and leave all other problems to us."

Shen Huimin assured domestic textile companies that Sheng Ke will provide valuable services.