In order to promote the transformation and upgrading of China's textile and garment industry and promote the implementation of the "going out" development strategy, in early April, the China Textile Import & Export Chamber of Commerce organized Chinese textile companies to go to India, Sri Lanka and other places to develop the textile and apparel industry, trade conditions and investment environment. In-depth research. After returning from inspections, Zhang Xi'an, the secretary-general of the China Textile Import & Export Chamber of Commerce, who was the leader of the trip, not only obtained the research results of the local investment environment, but also began to consider such issues: the trend of foreign investment triggered by marketization is irreversible, but domestic textiles What is the deep reason for the outward shift of garment enterprises? What impact will the rapid industrial transfer have on the overall development of the industry?
In the past two years, the industrial transfer has been surging. The China Textile Import & Export Chamber of Commerce (hereinafter referred to as the â€œTextile Merchants Associationâ€) has increased the frequency of visits to Southeast Asian countries. From the trip to Myanmar in June last year, to the visit of the silk industry in Thailand, Bangladesh and Malaysia to the beginning of this year, and to the exchange visits with Indian and Sri Lankan companies a month ago. The shift in the textile and apparel industry to Southeast Asia has attracted attention, and more and more companies are looking to find opportunities here. â€œEither from our visit to the team or from the inquiries of enterprises, we can all feel that the industry has a strong interest in investment and production in Southeast Asian countries. In this context, we led five companies to visit Indiaâ€™s Blandiq. BIAC's investment environment. During this period, trade associations and exchanges were also conducted with Indian and Sri Lankan industry associations and corporate representatives, respectively.â€ Zhang Xiâ€™an introduced.
In the 1980s and 1990s, the original intention of companies to consider outward investment in order to avoid export quota restrictions was different. Currently, many companies are looking to Southeast Asian countries because of cost pressures. The increase in labor costs and the wide spread of cotton at home and abroad have weakened the market competitiveness of Chinese enterprises. Zhang Xi'an explained: â€œIn domestic production, the price of cotton alone is RMB 5,000 or more per ton higher than that of foreign countries, and the pressure on unit products to generate revenue from additional value increases. Some companies can only go to Southeast Asian countries for production, while on the other hand there is no cotton imports. Quota restrictions, on the other hand, can also take advantage of local raw materials."
The BIAC visited by the Textile Chamber of Commerce in this visit is located in Andhra Pradesh in eastern India, which is India's third largest cotton producer. Adequate supply of cotton makes the garment city form a vertical integration system of "fiber to store". From the perspective of basic salary, the monthly salary of workers in the park is generally equivalent to only *** 700 yuan. Even in Sri Lanka, where labor costs are slightly higher, the monthly salary of its garment workers is only about 800 yuan. The advantages of raw materials and labor costs make these countries' textile and garment industries more and more optimistic about foreign investors.
Zhang Xi'an said that in terms of production efficiency, Southeast Asian countries are lower than China, but with comprehensive calculations, the cost competitiveness of domestic low-end and middle-end enterprises is certainly not as good as Southeast Asian countries. Therefore, it is also possible to understand the outward transfer of low-end and mid-tier companies.
The production investment must be adapted to local conditions. The problem of cotton and labor forces companies to consider â€œgoing away,â€ and which country to sit down to test the companyâ€™s strategic vision and operational wisdom. Zhang Xi'an pointed out that there are two forms of foreign investment in the industry: investing in garment factories or cotton spinning mills. The garment industry is a labor-intensive industry. This kind of investment is suitable for Myanmar and Bangladesh. The investment in textile mills is generally capital-based. From a production perspective, it is necessary to consider whether local raw material procurement is convenient. â€œIndiaâ€™s outstanding industrial advantage is that cotton can be self-sufficient. In contrast, most of Sri Lankaâ€™s raw materials need to be imported. The industrial chains in countries like Vietnam and Indonesia are all extending, and their industrial advantages will gradually be reflected.â€ Say.
The investors in India's Blantyk City of Apparel very much welcome Chinese entrepreneurs to visit and cooperate. The local industry is confident that in the next 10 years, India will have the potential to grab a share of the textile and clothing market in the country. Compared with other countries, its confidence comes from the local adequate labor supply. It is understood that BIAC Garment City was built, managed and operated by Britique, the largest garment company in Sri Lanka. During the inspection process, Zhang Xi'an had doubts: Why is this very competitive garment company in Sri Lanka investing in India? In a subsequent conversation with the representative of Sri Lanka, he learned about the longer-term planning of the company: â€œAccording to this person in charge, at present, Sri Lanka has also begun to experience labor shortages. In terms of potential labor supply, India is more secure. The BIAC Garment City we visited has more than a dozen companies and currently employs 16,000 people. Park representatives said that if more companies can be attracted to invest in this, the number of employees will double again, and this area will not be a problem. There are a large number of women aged from 18 to 30 years old who are proud of their work in this clothing city.In the park, the entire state of the workers is very comfortable.Contrary to our factory in China, even if the monthly salary can be 4,000 yuan, young people They are also reluctant to engage in the textile industry, and employees are generally less loyal to companies than Southeast Asian countries."
Zhang Xi'an suggested that companies must choose their investment forms according to their own development plans. â€œThe relative input costs of garment factories are low, and most of them are based on leasing, and the capital operation is more flexible. The textile mills generally need to invest more in equipment because they need more investment. Long-term planning also imposes higher requirements on the ability of enterprises to operate funds, but no matter what type of investment, there are certain risks, such as production management regulations, regulations, and trade union laws, which require companies to seriously study.
Extroverted transfer leads people to think deeply. In terms of past investment cases, such as Esquel and Red Bean were accepted by the local community. After all, companies that truly maximize their profits through overseas distribution account for a minority. Under the current situation, most enterprises investing in foreign countries hope to use local advantages and stabilize their orders. In the tide of industrial transfer, the phenomenon of companies choosing to invest outward rather than investing in the central and western regions of the country is also a matter of deep thought.
â€œActually, from the perspective of industry sentiment and its own production status, companies do not necessarily want to â€œgo outâ€ because there are many differences in culture and customs. It should be said that the best way is to transfer from the east to the central and western regions. , to maintain our industrial strength and competitive advantage for a period of time.â€ Zhang Xi'an believes that there are many inevitable factors in the industrial transfer, but led companies to choose to â€œoutwardâ€ instead of investing in the central and western regions, among which there are many people The reason for helplessness is that â€œthere is also a problem of rising labor costs in enterprises in the western and central regions. The monthly wages of the front-line workers in the western region are only 2,000 to 3,000 yuan, which is much higher than in the Southeast Asian countries. In addition, the supporting conditions cannot keep pace with the development of the industry and have also affected the Industry shifts to the central and western regions.The connection may be very effective in the early stage, but the situation of the field visit is far from the description.The stability of the local preferential policies and the degree of loyalty of the employees are also concerns of the eastern enterprises. problem."
Zhang Xi'an stated that the trend of outward shift of enterprises needs the attention of the industry. In this process, how to make domestic industries achieve healthy development requires the joint efforts of the industry. As a platform for providing business services, the Textile Chamber of Commerce will continue to provide pre-operational consulting for enterprises and lead the company on-site inspections. Through the exchange activities held in the industry, we share first-hand information on â€œgoing outâ€.
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