China's comprehensive advantages are still evident. Some textile enterprises talk about building fac

China is the largest exporter of textiles and garments in the world. The United States is China's largest textile and apparel export market. In 2017, China's exports to the United States accounted for 15.5% of the total textile and apparel exports.



Since 2010, the pace of Chinese textile and garment enterprises'foreign investment has accelerated rapidly. In addition to a number of countries, some enterprises also run factories in the states such as North Carolina, South Carolina and Arkansas, which range from spinning, home textile, chemical fiber, industrial and other fields.



There are two main modes for Chinese textile and apparel enterprises to invest abroad. One is the layout mode of manufacturing base, that is, to invest and build factories in local areas for production. For example, 70% of the garment factories in Cambodia are invested by China; the other is the value chain integration model, which extends and controls the raw material resources, design and research resources, brand resources and market channel resources at both ends of the industrial chain globally through mergers and acquisitions.



As early as 2012, Hangzhou Cole Group started to build a spinning mill in Lancaster County, South Carolina, USA, with an investment of more than 200 million US dollars, providing 500 local jobs. Trial operation began in 2015. The second phase of the project will be expanded in 2017.



Zhejiang Cixi Jiangnan Chemical Fiber Co., Ltd. was established in 2000 to produce regenerated polyester staple fibers. In September 2013, South Carolina invested $45 million to open a branch plant. The investment amounted to $45 million, bringing more than 300 people into employment.



Adidas China Supplier Suzhou Tianyuan Garment Co., Ltd. invested 20 million US dollars in Arkansas to build a fully automated and intelligent garment factory.



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A few years later, how do these textile enterprises feel when they go to the United States to build factories? Sun Zukang, chairman of Jiangnan Chemical Fiber Co., Ltd., made an account.



Eighty percent of the company's business is export, and nearly eighty percent is export to the United States. Therefore, running a factory in the United States is in line with the company's strategic direction of development.



In general, the cost of land, electricity and logistics in the United States is relatively low. Parts, infrastructure and human resources costs are high.



In terms of land cost, when domestic factories took 200,000 yuan per mu of land, the price of land in South Carolina was 10,000 US dollars per mu, which was about three times higher in China.



The cost of electricity is less than 0.4 yuan in the United States, and 0.75 yuan in Zhejiang Province. Cheap electricity is very important for factories like Jiangnan Chemical Fiber, which need 24-hour operation.



US natural gas is converted to RMB 1.2 per cubic metre. China has poor resource endowment, high import cost, higher price of natural gas and 1.2 per cubic metre of direct supply.About RMB 8, about RMB 3.



The United States has low oil prices and no Toll or bridge fees. Domestic logistics costs are about twice as high.



Cost of accessories is high < br />.


The cost of spare parts in the United States is about 7 times that in China. To buy an electric motor, it costs thousands of yuan to buy in the United States, which translates into tens of thousands of yuan. In American factories, all production lines are transported domestically, even the 10-element components are taken with them. In 2002, we began to cooperate with the largest distributors of chemical fibre products in the United States. They were foolish to see in their factories. The equipment was backward and the management was backward. The technology and equipment we eliminated were still in use. At that time, they wanted us to help with the renovation. I said that all the equipment should be scrapped.



Infrastructure cost is high < br />.


The cost of land in the United States is low, but building factories on land is expensive. It cost about 10 million US dollars to build the spinning building in the United States, and only 10 million RMB to build the same scale in China. The United States charges a high fee for land leveling, which costs $4 million for land leveling alone.



Financing and taxation are basically the same < br />.


Small and medium-sized enterprises in the United States generally face financing difficulties. We know from the customer survey in the United States that after the financial crisis, American banks tightened their lending to small and medium-sized enterprises. As a newly established foreign investment enterprise, we do not hope to raise funds in the United States. In the United States, if the business is not profitable, the bank will not lend you a penny. In terms of taxation, we asked the professional team to calculate that there is little difference in the overall tax burden between the two countries. We leave this job entirely to the local professional accounting firms, paying all kinds of taxes in accordance with the laws of the United States.



American employees are difficult to manage and unwilling to work overtime. Our entire Chinese team has managed for the past 24 hours.



Our factories in the United States were put into production at the end of 2015 and have been operating so far. It is estimated that the overall cost of operating a factory of the same size in the United States is twice as high as that of investing in a factory of the same size in China, and the energy spent is three times as much.



South Carolina used to be part of the Southern United States & ldquo; Textile Industry Corridor & rdquo; and Lancaster County was once a famous textile industry town in the United States. At its peak, Lancaster and two other surrounding counties formed the ldquo; textile industry corridor & rdquo; once gathered 20 textile enterprises. But in 2007, with the last textile factory moving to Latin America, the local textile industry almost disappeared.



China Cole Group, headquartered in Xiaoshan, Hangzhou, chose to locate its first overseas factory in Lancaster County, South Carolina. The factory takes advantage of South Carolina's central position in the cotton producing area of the United States to produce industrial cotton yarn. Some of the products are shipped back to China for sale, while others are supplied to local and peripheral markets in the United States.



Wang Ke, head of the Cole factory, said that electricity charges in South Carolina were more than half cheaper than those in China and cotton was nearly half cheaper. The land cost is low. We bought 880 mu of land in the United States. The cost per mu is less than $10,000, and we chose a better location. If the geographical requirements are not high, we can give it away free of charge. The cost of financing in the United States is low.



But there are also some problems. If the difference in labor cost is high, the difference is less than 160,000 yuan per employee per year; the construction cost of factory buildings is high, 1500 yuan per square meter in China and nearly 4000 yuan per square meter in the United States; visas are difficult to obtain. We want to send some technicians and managers to the past, but the U.S. requires that only American workers can not complete the work visa; the language is not clear, the U.S. only 0.9% of the people speak Chinese and gather in economically developed areas such as California, where recruitment costs are high, so communication is problematic.



Due to the benchmarking effect of Cole Group, its investment behavior has also led some other textile enterprises in China and India to move forward. Shortly after Kohl started work in South Carolina, a dyeing and printing factory and a cotton mill decided to settle down near it.



Lin Xinwei, who has introduced several textile enterprises into South Carolina to build factories and has now done investment promotion for China's projects in Georgia, said that according to his observation, the production cost of manufacturing in the United States in 2009 was about 12 times that of China, reduced to 5-6 times in 2012 and about 3 times in 2015. 2017 is almost the same.



Lin Xinwei said that, as far as electricity is concerned, the U.S. power energy industry belongs to market-oriented operation. If you come to Georgia to build a new plant, there may be three plants offering you a price at the same time. You can choose the best power service provider and there must be a cheaper price.



In terms of environmental protection, China's current environmental standards are actually higher than those of the United States. But the problem in China is that the EIA is very strict in the early stage, and the inspection may not be very strict in the operation process. In the United States, on the contrary, pollution does not matter. When you come in, the company should tell the management what chemicals your company will emit and how much it will emit. The government tells them that they must be limited to a certain standard. When the factory is in operation, the government will evaluate it. He will check and accept the factory without informing you. Speaking with data, if the factory exceeds the standard, it will be severely punished. If the factory is serious, it will be shut down.



Generally speaking, although the United States has low energy and land prices, but the Chinese traditional manufacturing industry chain is very complete, the comprehensive advantages are still obvious.



Since April this year, China and the United States have broken out relatively fierce trade disputes. Additional tariffs have also come into effect, and the impact on the textile industry is gradually emerging. Enterprises with factories in China and layout in the United States are less affected. The construction of factories across the country can reduce the impact of disputes and reduce risks by adjusting the layout of production capacity. Enterprises with only domestic factories are expected to slowly withdraw from the U.S. market or move their factories abroad. But in the current environment, the US will be more stringent in approving China's future investment. This also encourages entrepreneurs to be more cautious when considering investments in the United States, and at the same time drives some investments to shift more to Southeast Asian countries. This will also have a significant impact on the shrinking textile and apparel industry in the United States.