Attention: Africa'S Advantages Will Provide A Better Platform And Opportunity For Chinese Cotton Textile Enterprises

　 　 With the rapid development of China's economy and the rise of labor costs, more and more Chinese enterprises are investing in Africa. As the world's leading developer and operator of Africa's industrial ecosystem, the upgraded Africa integrated industrial park aims to build a bridge between Chinese enterprises and African markets and African governments, and explore African market resources and policy values. This magazine has specially opened a series of reports on "Entering the Upgrading Africa Integrated Industrial Park", inviting experts, entrepreneurs and others to deeply interpret the trend of African industrial transfer from different perspectives, as well as the advantages, opportunities and challenges therein, so as to provide reference for Chinese enterprises to seek broader market opportunities and realize global layout.

　　 According to the World Investment Report 2022 of the United Nations Commission for Trade and Development, foreign direct investment (FDI) flowing into Africa has reached a record $83 billion in 2022 from $39 billion in 2020, accounting for 5.2% of global FDI. The World Bank recently predicted that Africa's economic growth will be the fastest in the world in the future with the increasing demand for investment, trade and internal consumption markets.

　　 With the rapid development of China's economy and the rise of labor costs, more and more Chinese enterprises are seeking lower production costs and broader market opportunities. According to the Ministry of Commerce, by the end of 2020, China's investment stock in Africa has exceeded 43.4 billion dollars, and more than 3500 Chinese enterprises have taken root in Africa to invest and start business. So what is Africa's investment attraction for Chinese textile and clothing enterprises? This magazine interviewed Dong Kuiyong, President of China Cotton Textile Industry Association, and Vikas Budhiraja, Vice President of Shengnong Textile Garment Business, to interpret the trend, advantages, opportunities and challenges of Africa's industrial transfer.

　　 international relation

　　 China Africa mutual trust continues to deepen and cooperation fields are expanding

　　 This year marks the 67th anniversary of the establishment of diplomatic ties between China and Africa. Over the years, China Africa political mutual trust has been deepening and cooperation fields have been expanding. Since the "Belt and Road" initiative was put forward, China Africa economic and trade cooperation has accelerated. From the "Ten Cooperation Plans" of the Johannesburg Summit of the Forum on China Africa Cooperation in 2015 to the "Eight Actions" of the Beijing Summit in 2018, China has become Africa's largest trading partner and Africa's fourth largest investor for 14 consecutive years. The "nine projects" and Vision 2035 for China Africa Cooperation proposed at the Dakar meeting of the Forum on China Africa Cooperation held in 2021 clearly stated that the two sides will carry out cooperation in labor-intensive industries such as textiles and clothing according to local conditions in combination with the differences in the natural endowments and industrialization development levels of African countries. These are undoubtedly positive forces to promote the sustainable development of China Africa cooperation for Chinese textile and clothing enterprises investing in Africa.

　　 Dong Kuiyong stressed that the China Cotton Textile Industry Association is committed to serving the international cooperation of the "Belt and Road" in China's textile industry, will give full play to its role as a bridge and link, and will cooperate with the country to do a good job in investment investigation, policy guidance, investment attraction and other work related to the transfer of African industries, Organize and carry out experience exchange among cotton textile enterprises that have invested in Africa or are willing to invest in Africa.

　　 Acceptance conditions

　　 Gather five advantages, grasp opportunities, meet challenges and stabilize development

　　 Dong Kuiyong said that the development opportunities for Chinese textile enterprises to invest in Africa include the following five aspects.

　　 In terms of raw materials, Africa has many high-quality cotton producing regions. The cotton output of West Africa, represented by Benin, Mali, Chad and Burkina Faso, the "four cotton countries" in Africa, accounts for about 70% of the whole Africa, which will provide an important raw material guarantee for the development of cotton textile. In terms of labor force, Africa has a population of more than 1.2 billion, with an average age of about 20 years, the youngest population structure and low labor costs. The younger population structure has also created Africa's own consumption market potential. At present, Africa's per capita fiber consumption is far lower than the global average, with a large space for growth. In terms of developed countries' trade policies towards Africa, most African countries enjoy preferential trade policies of the United States and Europe. The United States and the European Union allow these countries to export textile and clothing products to the country or region without quota and tariff. In terms of preferential policies, African countries have introduced a number of preferential incentive policies in recent years to create a more favorable business environment for foreign investment.

　　 Dong Kuiyong also pointed out that in addition to the above advantages, in the process of industrial transfer, China and Africa are also facing greater challenges in the textile industry cooperation, such as political stability, social and environmental security risks; Some African countries have weak infrastructure; African workers lack skills and management talents. Therefore, Chinese cotton textile enterprises need to be well prepared. First, fully carry out the feasibility study and risk control of investment in Africa; Second, control the investment rhythm; Third, team building and management system establishment; Fourth, establish an emergency handling mechanism. Only in this way can we seize the opportunities and advantages of Africa's development and maximize win-win results.

　　 Supporting services

　　 Integrated industrial park, one-stop optimization of resource allocation

　　 In order to meet the needs of enterprises for industrial transfer in Africa and avoid risks and uncertainties, one-stop supporting services came into being. As the world's leading developer and operator of African industrial ecosystem, ARISE IIP aims to design, build and operate integrated industrial park supporting services for enterprises' overseas development.

　　 Vikas Budhiraja said that there are currently three industrial parks in operation in Shengfei (GSEZ Gabon in Gabon Special Economic Zone, PIA Togo in Adicobe Industrial Park, and GDIZ Benin in Benin Grujibe Industrial Park). In addition, seven industrial parks in C ? te d'Ivoire, the Democratic Republic of the Congo, and the Republic of the Congo are under development. GDIZ Benin and PIA Togo have parks focusing on the textile value chain. In addition to the above advantages, they also have landing tax incentives under the AGOA/EBA system, which can be integrated through the cotton product supply chain. The near shore Europe and the United States can help shorten the delivery time and save logistics costs. A series of tax exemption incentive policies exclusive to the parks, stable and highly price competitive power supply, Half allowance for basic salary of employees within 18 months after production, sustainability and compliance oriented platform and other advantages.

　　 At present, several companies such as Sri Lanka Garment Group (STAR), West Africa Garment Group (DTRT) and India KVS Group have established factories in PIA or GDIZ textile parks. In addition, the textile management company ATMS is implementing several textile projects in GDIZ and PIA for many African and Asian enterprises, including Benin Textile Company (BTC).

　　 Dong Kuiyong said that African advantages will provide a better platform and opportunity for Chinese cotton textile enterprises to strengthen their global layout and integrate global resources through "going global".