RMB appreciation, how do textile enterprises make industrial layout?

In the past two weeks, the continuous appreciation of the RMB has made export enterprises panic day by day. Although the export data in July was good, my country's textile and apparel exports climbed to US $25.49 billion, and it is difficult for textile and apparel companies to let go of that hanging heart."The exchange rate moves and businesses can collapse at any time."

It is for this reason, coupled with rising domestic costs and increasing environmental pressure, textile companies have to think about international layout. "Going out" is a consensus, and the proposal of the "Belt and Road" initiative undoubtedly adds more options to the multiple-choice question of where to go.

 1  

Deeper

From cost accounting to industrial layout On September 7, at the 2017 China Textile Industry "Going Global" Conference, Tang Xinhong, chairman of Jiangsu Tianyuan Garment Co., Ltd., who went to the United States to invest and set up factories, told that one and a half months ago, Tianyuan Garment Company held a signing ceremony with Georgia Institute of Technology and Robot Automation Sewing Company (SoftWearAutomationInc) to cooperate with a fully automatic T-shirt production line. "The average process time of the unmanned sewing line is 4 minutes, the average output range is 21 to 28 seconds, and it takes about 27 employees. Our production capacity next year is expected to be 1 million pieces, and by 2022 we will achieve 20 million pieces of production capacity, which is basically the same as that of Chinese factories, but the number of workers in the United States is only 11.4 percent of China's, mainly relying on intelligent production to complete." It is not difficult to see that behind Tianyuan's going out is no longer simple cost accounting, but more importantly, intelligent production layout.

This approach is in line with the "Guiding Opinions on Further Guiding and Regulating the Direction of Overseas Investment" just forwarded by the General Office of the State Council to the four ministries and commissions to encourage overseas investment: strengthen investment cooperation with overseas high-tech and advanced manufacturing enterprises.

Gao Yong, Party Secretary and Secretary-General of the China Federation of Textile Industry, said at the meeting, "The Guiding Opinions are by far the country's clearest and most clear policy guidelines on outbound investment. Most of the outbound greenfield investment projects and M & A projects in the textile industry fall into the category of outbound investment encouraged by the state."

At the same time, this is also the original intention of the China Textile Industry Federation to do a lot of research on "going out" in the past two years. In March this year, with the support of the National Development and Reform Commission, China Textile Union led the establishment of the "China Textile International production capacity Cooperation Enterprise Alliance" to provide "going out" services for enterprises. The platform timely and objectively transmits the latest investment policies and information at home and abroad, and actively promotes more promising investment projects.

The 2017 "going out" conference held this time is another important opportunity for China Textile Federation and China Textile International production capacity Cooperation Enterprise Alliance to promote industrial cooperation between China's textile industry and key countries and regions.

Today, with the increasingly sound and perfect economic development, policies, regulations, and infrastructure of overseas regions, especially countries and regions along the "Belt and Road Initiative" route, and the overseas layout of textile enterprises that "went out" in the early days has begun to take shape, the "going out" trip of China's textile industry has become more and more smooth, and all parties have reported their greatest enthusiasm to promote China's textile industry to move towards the world and the world.

On this occasion, the third "going out" conference will be held to further stimulate the confidence and determination of powerful textile enterprises to "go out", and even further promote China's textile industry to enter the international market and a new stage of global layout.

Some people say that from the Tianyuan project, we can see that the textile industry is going out to a deeper level. Indeed, not only the cooperation of high-end technical resources, China's textile enterprises have also made some achievements in the integration of brand resources and market channel resources. In 2016, Ruyi group completed the acquisition of French SMCP fashion group, which aroused many concerns. Qiu Yafu, chairman of Shandong Ruyi Technology Fashion Group, said that SMCP sales contributed a lot to the group last year.

 2  

Faster

From passive layout to active attack in addition to deep, the pace of the textile industry to go out has a major feature: faster.

According to the statistics of the Ministry of Commerce, from 2003 to 2016, China's textile industry's foreign direct investment totaled 7.63 billion billion US dollars, with an average annual growth rate of 28.25 percent, accounting for 7.89 percent of the total manufacturing foreign direct investment during the period. Among them, the stock of foreign direct investment in the textile industry is 4.73 billion US dollars; the stock of foreign direct investment in the textile, clothing and apparel industry is 2.059 billion US dollars; the stock of foreign direct investment in the chemical fiber manufacturing industry is 0.842 billion US dollars.

In particular, the amount of foreign direct investment in the textile industry reached 2.66 billion billion US dollars in 2016, an increase of 89.3 percent over the same period last year. Since the global financial crisis in 2008, foreign direct investment in the textile industry has accelerated significantly, with an average annual growth rate of 30.88.

The acceleration of overseas investment in the industry reflects the enhancement of the initiative of textile enterprises to carry out international layout. Gao Yong said: "China Textile Federation's spring research for several consecutive years has covered international topics. We deeply feel that the active awareness of industry enterprises in international layout has increased significantly. More and more backbone enterprises have changed from passive overseas layout required by customers to active layout after careful consideration. Last year, sunshine group went to Ethiopia to invest as an example, its project, decision-making, engineering construction, personnel training are in efficient progress. Another example is Lutai. In the spring of 2014, there was no overseas deployment action. At present, its industrial chain from spinning to garment making in Vietnam has been built very complete, and its three garment factories in Vietnam, Cambodia and Myanmar have been fully put into operation. The design studios in Milan and New York are also operating smoothly. More and more enterprises realize that taking the initiative to connect the new capacity and the layout of the target market at the global level is conducive to maintaining the international competitive advantage."

By the end of 2016, China's textile industry had set up 1082 textile, clothing and apparel enterprises abroad, an increase of 8.3 percent over the end of 2015, and the stock of Chinese investment was 6.86 billion billion US dollars, an increase of 31.4 percent. In 2016, the investment flow of Chinese enterprises in overseas textile industry, textile, clothing and apparel industry was 1.64 billion US dollars, an increase of 47.7 percent over 2015, and the operating income was 7.3 billion US dollars, an increase of 96 percent. At the end of the year, there were 9800 Chinese employees, an increase of 1 percent. This is the data given by Chen Zhong, director of the Department of Foreign Investment and Economic Cooperation of the Ministry of Commerce.

In this regard, Gao Yanmin, director of the Consumer goods Industry Department of the Ministry of Industry and Information Technology, said: "after the financial crisis, the textile industry has gradually entered the stage of industrial capital going out from products, which is the objective law of the development of the world textile industry. It also shows that the connotation of the internationalization of the textile industry is deepening, and the industry has entered a new stage of transnational layout."

3  

Wider

For a long time, textile enterprises have been going out to Southeast Asian countries, and "Belt and Road Initiative" not only provides opportunities for China's textile industry to strengthen international cooperation, but also provides more possibilities.

In this regard, Gao Yong said: "For China's textile industry, the six corridors and six roads of the Belt and Road Initiative have pointed out key overseas investment regions and countries. China-Indochina Peninsula, one of the six major economic corridors, is the current green space investment gathering place for China's textile industry capital. China-Pakistan, Bangladesh-China-India-Myanmar and China-Central Asia Economic Corridors also have rich resource endowments for the development of textile industry. In Africa, such as Ethiopia, the first pilot and demonstration countries also have great potential for the development of textile industry."

Tianhong, Blum Oriental, Huafu Color Spinning, Youngor, Lutai, Xindadong, Yulun and other enterprises have invested more than 2.5 million spindles in Vietnam in total, and the cotton yarn output exceeds half of Vietnam's total output. At the same time, Shenzhou International, instant hair, Dongdu and other large knitted clothing enterprises have basically built a domestic and Southeast Asian production capacity closely matched with the order model.

At the same time, more than 20 Chinese textile enterprises, including Sunshine, Huafang, Lianfa, Wuxi Yimian, Wuxi Jinmao and Guangdong Huida, have signed investment cooperation memorandums or formal agreements in Ethiopia, Africa, and some projects have already landed.

The Special Adviser to the Prime Minister of Ethiopia and Minister of State Tedsay who came to participate in the 2017 China Textile "Going Global" Conference? "The Belt and Road Initiative defines the strategic partnership between our two countries. Ethiopia has become one of the largest recipients of FDI in Africa. In the textile and clothing industry, it is the second largest recipient of FDI in the world, second only to Vietnam. In the past 10 years, Chinese investment in Ethiopia has increased fivefold, and Chinese textile enterprises have made great contributions. Ethiopia has a 0.1 billion population, with young people accounting for about 70%, and their wages are very competitive in the world."

Later, Tedsay? The sea also elaborated on the comparative advantages of infrastructure, electricity, location and tariffs, and said, "Ethiopia wants to become a major manufacturing hub in Africa by 2025, and the focus is on light manufacturing industries such as textiles and clothing." To this end, Ethiopia is currently developing numerous industrial parks and has introduced attractive incentives.

Other companies, such as Tianyuan and Ruyi mentioned at the beginning, choose to invest in the United States. Once upon a time, the United States was only a consumer market and an export market for Chinese textile enterprises. Since Cao Dewang, chairman of Fuyao Glass, went to the United States to build a factory and analyzed the advantages of the market, the United States has entered the vision of more Chinese enterprises.

Some people ask, Europe and the United States used to transfer industries to Asia because of high labor costs, now, a return of manufacturing can bring down the wages of local workers? "White-collar wages are about eight times that of China, and blue-collar wages are about three times that of China." Tang Xinhong said so.

So why choose the United States? Choose Arkansas?

In addition to having a highly automated manufacturing model, Mark Han, director of the Arkansas Economic Development Commission, described other investment advantages: "Arkansas is located in the middle of the United States and is an important hub center, including water, land, rail, and air transportation. mode. Arkansas ranks sixth in the world in terms of cotton acreage, and the cost of electricity here is very low, with an average industrial power consumption of 5.72 cents per kilowatt-hour. As a result, business costs are low and companies can reach all parts of North America through a very short supply chain. Finally, Arkansas is a big manufacturing state, with 13% of the workforce working in manufacturing and a very low percentage of union members." This year, Shandong Ruyi Technology Fashion Group also decided to invest $0.41 billion in Arkansas to build a factory. "More than 150 companies from France, China, Denmark, South Korea, Vietnam and other countries are located in Arkansas." Hanmark said Arkansas is a generally promising investment location for many foreign companies in the United States.

Next, where should Chinese textile enterprises go? Should they go to Southeast Asia, which is closer to China, or to Africa, which is cheaper, or to the United States, which is closer to the market? Behind the seemingly simple multiple choice questions is a set of complex logic.