Will Central Asia be the next hot area for textile industry transfer?

From April 30 to May 2, Duan Xiaoping, Vice President of China Textile Industry Federation and President of China Chemical Fiber Industry Association, went to Tajikistan to investigate the local investment situation and cost factors. Liu Yanwei, Vice President of China Textile Construction Planning Institute, Li Jie, Secretary-General of China Cotton Textile Industry Association, and representatives of Textile Branch of China Council for the Promotion of International Trade and related domestic enterprises conducted a survey.



Located in southeastern Asia, Tajikistan is one of the first countries to respond to &ldquo and &rdquo. Tajikistan is rich in natural resources, complete in mineral resources and large in reserves. Hydropower resources account for about 60% of the total Central Asia, ranking eighth in the world. Local cotton planting area is about 185,000 hectares, annual production of 100,000 tons of lint cotton, of which only 20% is used for domestic production, and 80% of the yarns produced are exported to foreign countries. Generally speaking, there is ample space for the development of textile industry.



On the first day of arrival, President Duan Xiaoping and his delegation met and talked with Amin, the first deputy minister of Tajikistan's Ministry of Economy and Trade, and relevant departments. President Duan expressed the mission's purpose. Firstly, the importance of textile industry in China was illustrated through a set of figures. Secondly, the challenges and difficulties faced by China's textile industry were introduced. First, the aging of population, the reduction of effective labor force, the gradual disappearance of labor advantage in wages and other aspects. Second, Sino-US trade frictions led to the loss of international orders and some customers. It tends to choose products from overseas processing plants of Chinese enterprises to avoid risks. At the same time, tower inspection and investment are also in line with “ along the way ” initiative.



Amin, the first deputy minister of Tajikistan's Ministry of Economy and Trade, said that increasing investment is the only way to industrialization. The ultimate goal of Tajikistan's textile industry is to complete the whole industrial chain from cotton planting to textile and garment manufacturing. The products partly meet domestic demand, and the rest are exported to foreign countries. At present, most of them export semi-finished products and few of them are made in China. We hope that the China-Textile Federation will bring more cooperation opportunities to Tajikistan.



According to reports, Tajikistan's main factor advantages are energy, labor, raw materials, tax and so on. In the energy sector, power generation depends on abundant water resources, and the cost of electricity consumption is equivalent to about 0.35 yuan/degree of RMB; in the employment sector, the local per capita wage is low, about 800-1000 yuan (after tax), not only that, the local government also set up textile specialties in universities to ensure the demand for professionals; in the taxation sector, according to the size of investment, tax reduction standards of different years and degrees can be enjoyed. Encouraging exports is the strategic goal of national development. Exports can enjoy tariff relief. In the process of investing and building factories, imports of raw materials and equipment that Tajikistan does not possess can enjoy tariff relief and VAT relief. In the financial environment, investors'earnings can be remitted from Tajikistan without restriction.



This time, the delegation also came to Sino-Thai (Dangala) New Silk Road Textile Industry Co., Ltd. to understand the personal feelings of Chinese-funded enterprises in Tajikistan. The company plans to construct four phases, including one phase of 60,000 spindles combed compact spinning and the second phase of 5,760 spindles air spinning, and three and four phases of knitting, printing and dyeing and woven projects respectively. The first phase of the project is equipped with first-class imported Swiss Rieter equipment, with advanced international standard monitoring instruments.



According to reports, the local cotton quality is relatively good, but the horse value is slightly higher, which limits the spinning of high count yarns. The mountain area accounts for about 93% of the country. The transportation costs brought by geographical location and transportation facilities need to be fully considered before investment. The local folk custom is simple and the integration is smoother. The entry of China and Thailand has made great contributions to the local employment promotion, improving the living standard and increasing the tax revenue. It has won many awards, obtained &ldquo in Tafang, &rdquo, &ldquo, Tajik national excellent industrial enterprise award ” in &ldquo, along the road &rdquo, and in the initiative, it was selected as the second &ldquo and along the way. & rdquo; Outcome List of International Cooperation Summit Forum.



As for the trend of international distribution of China's textile industry, President Duan Xiaoping said that the past five years will be a critical period for two main reasons: first, the Sino-US trade relations will gradually ease and tend to balance; second, the speed of machine replacement in China's textile industry will continue to improve in the past five years, the level of mechanization will increase substantially, and some enterprises that have not chosen machine replacement will choose & ldquo; Go to & rdquo; this decision will be completed in 3-5 years. It is hoped that both sides will seize the opportunity and make every effort to promote exchanges and interaction and win-win cooperation.

Uzbekistan is located in the hinterland of Central Asia. It is “ along the way ” the construction of important fulcrum countries is rich in natural resources. In the past five years, the growth rate of GDP has been maintained at over 7%, the economic and trade environment is good, and the textile industry has been an important industry in the national economy and export earning. At present, there are more than 3500 textile enterprises and more than 4700 garment enterprises in Ukraine's textile and textile industry, with an annual output of 700,000 tons of cotton yarn, 1.2 billion meters of fabrics, 140.7 million tons of knitted fabrics, 2.2 billion garments and 132 million pairs of socks. The export value of textile and garment is 1.257 billion US dollars (including cotton). It is noteworthy that in the process of development of Uzbekistan's textile and apparel industry, the President made it clear that Uzbekistan would stop cotton exports from 2020, demonstrating Uzbekistan's determination to transform from a traditional cotton-producing country to a textile country.



According to reports, Uzbekistan's energy prices are very favorable, with electricity charges ranging from 0.25 to 0.28 yuan/degree (equivalent to RMB), natural gas 0.48 yuan/cubic meter, water 1.8 yuan/cubic meter and wastewater treatment fees ranging from 0.25 to 0.28 yuan/degree (the same below), and natural gas 0.48 yuan/cubic meter.9 yuan per cubic meter. The country has 11 years of compulsory education, rich labor resources and high quality, with an average wage of about 1,000 yuan per month (before tax).



As the closing point of the visit to Central Asia, the delegation held talks with the Uzbek Textile and Garment Association and the Investment Committee to exchange views and suggestions on the development of Chinese textile enterprises in Uzbekistan.



During the talks, Fakhruddin Jumaniyazov, Vice Minister of the Textile and Garment Association of Uzbekistan, introduced the current preferential policies of Uzbekistan and the direction of its industrial development.



Policy preferences



1. Enjoy preferential customs clearance;



2. Every state in Uzbekistan has a free economic development zone. Investment in the park can be exempted from all taxes and fees for seven years (except personal income tax). The specific enjoyment period can be extended according to the amount of investment. The amount of investment is over 50 million US dollars, the energy needed is transported free of charge by the state, and the duty-free time is extended from 7 years to 10 years;



3. The annual output of Uzbekistan cotton is about 1 million tons. Now, if you buy cotton produced in 2017, you can enjoy a 15% price discount;



4. The level of local cotton processing equipment is relatively old. At the same time, in order to solve the problem of consistency between production and demand, the state can provide land and encourage enterprises to plant, process and use cotton independently, so as to obtain cotton that meets production needs and reduce production costs. It is reported that the cost of cotton planted independently by enterprises is about 900 US dollars per ton, while the market procurement needs 1500-1600 US dollars per ton. In addition, 60% of the cost of cotton planting will be borne by the state. If drip irrigation technology is used, the state will subsidize 50%;



5. Exports of processed cotton products in China enjoy 20% export tax rebate.



Industry Development



1. In the future, 70% of Cotton-Planting land will be allocated to enterprises for self-cultivation;



2. Focus on industrial upgrading. More than 80% of enterprises have completed equipment updating in the past two years after calling on enterprises to update equipment in 2016;



3. The privatization of state-owned enterprises has been gradually completed, and the Textile and Garment Association of Uzbekistan is stepping up its cooperation with international institutions. About 260 projects have been completed or are in progress;



4. At present, there are about 70 countries exporting Uzbekistan's products. With the continuous development of the textile and garment industry in Uzbekistan, it is planned to further expand the export area to 90 countries;



5. After stopping cotton export in 2020, in 2020-2025, export products will be further transformed downstream, cotton yarn exports will be reduced, and more value-added products will be left at home;



6. At present, Ukraine's printing and dyeing and chemical fibre links are relatively weak. Relevant enterprises are welcome to be stationed in Ukraine. For environmental protection, it is necessary for enterprises to deal with them once after reaching the standard, and then be handled by the state in a unified way.



Duan Xiaoping, Vice President of China Textile Industry Federation and President of China Chemical Fiber Industry Association, said that the visit to Ukraine had yielded a lot, which increased the confidence of Chinese enterprises in investing in Ukraine. Combining with past experience, it was very promising for the future development prospects.



Liu Yanwei, Vice President of China Textile Construction Planning Institute, introduced the results of the visit. China's textile enterprises go out is the result of their own development needs and external environment. Ukraine has abundant cotton resources, attractive energy prices, high-quality and cost-effective labor force, coupled with the political stability of Ukraine, which is an important hub linking Europe. These factors will make Ukraine one of the important choices for Chinese enterprises.



Li Jie, Secretary-General of China Cotton Textile Industry Association, said in the exchange that the member enterprises of the association cover more than 70% of China's cotton textile production capacity and organize nearly 10 industry exchange activities every year. The China Cotton Textile Industry Association and the Textile Branch of China International Trade Promotion Committee are willing to build a communication platform for both sides of China and Uzbekistan, jointly organize investment negotiation activities, so as to provide solid information for interested enterprises to continue. Opportunities for field visits.



The delegation also visited two of the most representative industrial parks invested by China and a spinning enterprise invested by Turkish enterprises in Ukraine.



Pengsheng Industrial Park was invested and constructed by Wenzhou Jinsheng Trading Co., Ltd. and started construction in 2009. It was appraised as China's state-level Overseas Economic Cooperation Zone in 2016. By the end of 2017, Pengsheng Industrial Park had invested a total of US$138 million. Sixteen enterprises had settled in the park, involving ceramics, valves, mobile phone manufacturing, sausage, leather, steel rolling and other fields. In cooperation with the Institute of Cotton Research of the Chinese Academy of Sciences, the park has carried out a cotton planting pilot project. It plans to focus on the development of modern agriculture, textiles and knitted fabrics in the future. The total number of employees in the park is more than 1500 at present.85% are local employees. According to the person in charge, local workers have strong ability and willingness to learn skills, and their production skills and work progress are better.



Jinsheng Group has invested in the Establishment of Liteslu Uzbek Industrial Park in Karshi, Uzbekistan. The project signed an investment agreement in 2014. The first phase project of 120,000 spindles combed compact spinning was put into operation in July 2016, with an annual output of 22,000 tons of cotton yarn. The second phase of 120,000 spindles modern spinning and 150 looms is expected to be put into operation in the first quarter of 2020. Jinsheng Group also plans to establish an industrial park in Tashkent, the capital of Uzbekistan, and has signed a intention agreement. The project is under approval. At the same time, Jinsheng Group plans to launch cotton planting business in Uzbekistan in 2020 to meet production demand. The representative of the enterprise said that Uzbekistan is in the early stage of reform and opening up and has many development opportunities. Jinsheng Group Industrial Park hopes to find more downstream partners to work together on the first day of Uzbekistan's development.



The delegation also visited Bakan Textile (transliteration) invested by Turkish enterprises, which has a spinning capacity of 63,000 spindles. The whole process automation equipment of Tlu and Jinsheng is used in front and back spinning respectively. The main products are 20-30 pure cotton yarns.



Finally, President Duan Xiaoping summarized the Uzbekistan visit and made suggestions. It is hoped that Ukraine will take cautious administrative restrictive measures, such as restrictions on cotton yarn exports should not be taken lightly, the development of industrial chains will take time, and easy restrictions will stifle investment and have a negative effect. It is hoped that the import of auxiliary materials needed by downstream industries can be encouraged, not only from the tariff aspect, but also from reducing administrative approval links and related additional costs, so as to promote the formation of production downstream as soon as possible. In addition, in the process of parking development, Chinese enterprises will communicate more conveniently with the parks constructed by China, and they will also prefer to choose Chinese parks, especially those constructed by Chinese textile enterprises, hoping that Ukraine can speed up the construction of relevant parks. In the past five years, China's textile enterprises & ldquo; going out & rdquo; and at the critical time, China Cotton Textile Industry Association and China Council for the Promotion of International Trade Textile Branch will further strengthen communication, strive to make Uzbekistan the best investor, safeguard the interests of both sides, and create a new model of win-win cooperation.