How Can The Chinese Textile Industry Promote The New Development Of Cooperation With ASEAN Countries Under The Impetus Of "One Belt And One Road"?

In recent years, trade and investment cooperation between China and ASEAN has been developing rapidly.

China ASEAN textile and garment industry has strong complementarity.

China is the largest textile and garment producer and exporter in the world. It has a complete industrial chain in the world. The textile industry has a complete range of products, high level of processing support, advanced technology, high cost performance, and can meet the needs of ASEAN textile and garment enterprises.

Textile and garment industry is one of the important manufacturing industries in Vietnam, Indonesia, Kampuchea, Burma, Thailand and other ASEAN countries. It has labor cost advantages, cotton price advantages, tariff preferences, and preferential policies to attract foreign investment.

In recent years, many textile and garment enterprises in China have invested and established factories in ASEAN countries, thus promoting the internationalization of China's textile and garment industry.

The textile and garment industry is one of the leading industries in China to actively promote the "one belt and one way" construction. At the same time, it is also the preferred livelihood industry for promoting industrial development, creating national wealth and providing a large number of jobs along the "one belt and one line" countries and regions. ASEAN is an important partner of China in the construction of "one belt and one road". It is also one of the key areas of China's textile international capacity cooperation.

There are many opportunities for textile and garment industry in ASEAN countries.

Vietnam

Vietnam is recognized as the third largest exporter of clothing in the world, and textiles are one of Vietnam's key export products. In 2018, Vietnam's textile exports amounted to about 36 billion 200 million US dollars, and imports of raw materials and accessories amounted to US $23 billion 600 million. Among them, about 12 billion 800 million US dollars were imported, 5 billion 470 million US dollars for textile accessories, 3 billion US dollars for cotton and 2 billion 419 million US dollars for textile yarns. In the first 9 months of this year, Vietnam's textile and clothing exports showed an increasing trend, reaching US $24 billion 800 million, an increase of 10.4%.

Since 2019, Vietnam's cotton import volume is estimated to be 7 million 600 thousand packages driven by the opportunities of domestic textile expansion, increased foreign investment, and CPTPP and Vietnam EU free trade agreements. It is estimated that the export volume of textile and clothing in 2019 will reach US $40 billion, an increase of 14-15% over the previous year.

In recent years, Vietnam has used the new opportunities brought about by the FTA to cover the entire textile industry chain and continuously absorb large amounts of investment from home and abroad. Around the city of Hu Zhiming, textile enterprises from China are also increasing investment. They even use the "ten years of gold in Vietnam's textile industry" to describe this development process. The large textile enterprises such as Huafu fashion, Tianhong textile, Rutai and Bailong East are expanding their capacity in Vietnam.

Vietnam investment guide

Two, Indonesia

Indonesia has released the 4 development roadmap for manufacturing, aiming to keep pace with the pace of global industrial modernization. Indonesia's Ministry of industry has identified the textile industry and garment industry as one of the five priority industries in Indonesia's 4 industry plan. To enhance the competitiveness of the textile industry, the Ministry of industry will focus on strengthening human resources training, technology upgrading and digital technology support for the industry. The government will continue to strive for low tariffs or zero tariffs on Indonesia to the relevant export market countries, and increase the development of local characteristic brands.

In 2018, Indonesia's largest source of foreign exchange income was the textile industry, with exports reaching US $13 billion, an increase of 5% over the same period last year. Indonesia's industry minister said Indonesia's textile industry grew by 8.75% in 2018. The textile industry is not only one of Indonesia's main economic driving forces, but also provides employment opportunities for about 3000000 people and focuses on the export of products.

According to the data provided by the Indonesian Statistical Bureau, Indonesia's textile industry is expected to grow by 19% in 2019, and there is no sign of any slowdown in development. In the first quarter of 2019, the export orders for Indonesian garment production surged by 29%, which promoted the development of Indonesia's entire textile industry and increased the overall output of Indonesian textile products by 4.5% in the same period.

Three, Kampuchea

Kampuchea's largest industry, light industry and textile industry: accounts for more than 75% of Kampuchea's total exports, and employs 700 thousand (according to the data provided by the government's workers who buy insurance), but in fact about 1 million of the direct practitioners, about 4 million people rely on this industry to support their families, accounting for 1/4 of the national population. Young labor and international trade preferences are the advantages of Cambodia. Nearly 1000 textile enterprises have invested in Kampuchea.

At present, Kampuchea's textile industry is mainly clothing, and garment enterprises are mainly Chinese funded enterprises. In addition, there are five or six cloth factories in Kampuchea, and there are about more than 200 accessories factories, trademark and button factories. In textile and garment enterprises, Chinese mainland enterprises account for about 41%, plus China, Hongkong, Macao and Taiwan, textile and garment enterprises in Greater China account for 70% of Kampuchea's textile and garment enterprises, leading enterprises in Kampuchea.

Kampuchea Investment Guide

Four, Malaysia

The textile industry has always been a key industry in Malaysia, mainly composed of four sections, namely, basic textile (spinning, weaving, printing and dyeing finishing, etc.), clothing manufacturing, textile products and accessories. Among them, the spinning and weaving industry accounts for a relatively low proportion, and the development of printing and dyeing and garment industry is relatively mature. According to the statistics of Malaysia investment and Development Bureau, there are 970 registered factories in Malaysia textile industry, of which 400 garment factories, 570 home textile yarns, weaving, knitting and finishing factories have solved the employment of 68 thousand workers.

A textile group in Shandong, China, invested 500 million US dollars in 2013 to build 500 thousand high-end combed yarn items in the Malaysia Industrial Zone in Johore. It is China's largest textile investment in Malaysia. The group is a large comprehensive industry integrating spinning, weaving, clothing, import and export trade and transnational production and operation in China. It is the top 20 enterprises in China's cotton textile industry.

Five, Burma

The "one belt and one way" initiative, the Lanmei cooperation mechanism and the construction of China Burma economic corridor have brought development opportunities for the Sino Burmese garment industry cooperation. China is not only a source of investment and important raw materials and intermediate products for Burma's textile and garment industry, but also a consuming country of Burma's textile and clothing products. Chinese textile and garment enterprises have brought the experience of organization and management of industrial production, nurtured management talents for the local, improved the overall technology and technology level of Burma's garment manufacturing industry, and promoted the benign development and transformation and upgrading of Burma's garment manufacturing industry. Clothing has surpassed natural gas to become Burma's largest export product, while China has invested hundreds of clothing enterprises in Burma.

Burma Investment Guide

Six, Philippines

Local clothing manufacturers in Philippines hope that the government can stimulate local clothing and textile industry through tax revenue, and appeal to the government to attract Chinese enterprises interested in investing in investment cooperation.

Robert, President of the Philippines foreign purchasers Association, said the industry needed government subsidies, especially labor and electricity expenditure, to reduce the cost of doing business in the country. "Some Chinese companies are consulting on the establishment of factories in Philippine stores. "Robert stressed that Philippines should make good use of this point to attract Chinese enterprises to come.

The Federation of exporters of Philippines has also proposed more tax subsidies, which are now being legalized.

It is understood that the government is promoting tax reform to attract higher quality investment opportunities. While reforming tax incentives, we should gradually lower the standard of enterprise income tax.

Robert said that the benefits of preferential taxation in Philippines's labour law should not be deleted. On the contrary, more rights should be given, such as allowance rights, labor force enhancement, skills training and so on. "Clothing industry is a very labor-intensive industry, you know. "Robert said.

The clothing and textile industry used to be competitive in the export market, and even in 1990s it was considered a sunrise industry. Since the abolition of textile quotas by WTO in 2005, the export performance of Philippines has declined. The clothing and textile enterprises in the country have also experienced numerous difficulties, such as factories closing down, shrinking scale and large layoffs.

China ASEAN textile and garment industry cooperation proposal

Chinese and ASEAN enterprises have large space for complementary cooperation and many business opportunities in textile and garment industry, especially Chinese enterprises can produce products in ASEAN countries and sell products to the third party market. Bai Xin group, as a supplier of Southeast Asian enterprise services, is committed to registration, tax declaration and investment docking of local enterprises in Southeast Asia, and can consult with Bai Xin group.

We should seek cooperation between local enterprises and strengthen trade unions and associations. Learn more about ASEAN industry information and identify ASEAN partners.

It is right to set up an industrial park for Chinese textile and garment enterprises in ASEAN countries, so as to promote the whole industry chain going out and supporting development.

Trade and investment cooperation with local enterprises in textile raw materials, accessories, machinery, dyes and auxiliaries.

China's textile industry has complete categories, advanced equipment, low price and maintenance costs, and is easier for ASEAN enterprises to accept. Chinese textile and garment machinery and equipment enterprises enter ASEAN and cooperate with machinery and equipment to assist ASEAN countries in improving production efficiency.

The near future, Report on Trade and investment cooperation between China and the Mekong River textile and garment industry China's textile and garment industry is a pillar industry shared by Lam and other countries. It is also an important entry point and growth point for the six countries to promote trade, investment interaction and establish a capacity cooperation system.

The Lancang Mekong River Cooperation (hereinafter referred to as "Lan Mei cooperation") is a new subregional cooperation mechanism jointly launched and built by China, Kampuchea, Laos, Burma, Thailand and Vietnam. According to the six governments "3+5+X cooperation framework" Capacity cooperation is the priority area of cooperation between Lancang and the six countries.

In 2010, the China ASEAN free trade area was fully built. During the transition period, tariffs on the vast majority of goods exported to Vietnam, Laos, Kampuchea and Burma have now been reduced to zero, further facilitated trade and cooperation between China and the five Mekong River textile industrial chains. With the increasingly close cooperation in the industrial chain, the trade is developing vigorously. The importance of the Mekong River in the export trade of China's textile industry is increasing.

Thanks to the proximity of the geographical location and the double preferential tariff conditions of the China ASEAN Free Trade Area, the Mekong River has become one of the most important import sources in China's textile industry.

China's exports of textiles and clothing to major countries and regions in 2018

Yarns are China's most important textile and apparel products imported from the Mekong River. In 2018, imports amounted to US $2 billion 470 million, accounting for 46.2% of China's total imports of textiles and clothing from the Mekong River, accounting for 30.4% of China's total imports of yarn from the world. Cotton yarn imports amounted to US $2 billion 180 million, accounting for 88.2% of the yarn imports from the Mekong River, accounting for 37.3% of China's imports from the global cotton yarn. Vietnam is the largest source of yarn imports in the five Mekong rivers, and also the largest source of yarn imports in China. Some of the yarn is a product of Chinese funded enterprises, returning to China for further processing. In 2018, China imported yarn from Vietnam to US $2 billion 350 million, accounting for 95.1% of the yarn imports from the Mekong River, and Vietnam's cotton yarn accounted for 98.3% of the total imports of the Mekong River.

Clothing is another large category of products imported from China by the Mekong River. In 2018, imports amounted to US $2 billion 150 million, accounting for 40.2% of China's total imports of textiles and clothing from the Mekong River, and slightly more imports of knitted garments than woven garments. Vietnam is the largest source of imports in the Mekong River and the largest source country of clothing imports in China. In 2018, imports amounted to 1 billion 470 million US dollars, accounting for 68.2% of the clothing imports from the Mekong River. Imports from Kampuchea and Thailand amounted to US $400 million and US $230 million respectively, accounting for 18.1% and 10.7% of China's clothing imports from the Mekong River respectively.

Clothing is also China's fastest growing imports from Lancang Meizhou, which is affected by the layout adjustment of international brands, and the clothing products produced by Lancang are increasingly entering the domestic demand market in China. In 2018, China's clothing imports from the Mekong River region increased by 93% over 2015, with an average annual growth rate of 24.5%, which is 18.1 percentage points higher than the average annual growth rate of China's imports from the global garment market. Among them, the average annual growth rate of clothing imports from Kampuchea, Vietnam and Laos was over 20%, reaching 26.2%, 25.8% and 21% respectively. In the first half of 2019, China imported 1 billion 40 million dollars from the Mekong five countries, an increase of 16.1% over the same period last year, which is 13.9 percentage points higher than that of the same period.

China's textile and apparel exports to the Mekong River

The import and export trade structure at this stage reflects the formation of the industrial chain of "China's textile fabric supply - the garment processing of the Mekong River five countries" between China and the Mekong River. A considerable part of Vietnam's yarn products have entered China for post weaving and dyeing and finishing processes, and become an indispensable raw material supply for China's textile industry chain. Some clothing products produced by the five Mekong countries have also entered the domestic market of China, providing more quality and inexpensive consumption choices for Chinese residents.

Sketch map of textile and clothing trade structure between China and Mekong River

In recent years, the cooperative relationship between China's textile equipment manufacturing industry and the textile industry of the Mekong River has become increasingly close. In the future, as the textile industry chain of the Mekong River develops towards intensive and deep processing links, the cooperation space with China's textile industry will become more diverse.