Deal With Export Predicament Textile Enterprises Accelerate Pnational Production Layout

An export processing sweater can earn about 30 yuan in the early 90s of last century, but at present there is only about 1 yuan profit, and some orders even lose money.

Lin Xifang, deputy secretary of the Dalang Town Committee of Dongguan, told reporters recently that influenced by various factors such as RMB appreciation, raw material price increase, export tax rebate reduction, workers' minimum wage increase, and land use electricity shortage, Dalang's largest export production base in the country is facing unprecedented challenges.

Not only is Dalang, but the pressure on textile exporters across China will be further increased this year.

Since the beginning of this year, China's textile and clothing exports have slowed down significantly. According to customs statistics, China's textile and apparel exports amounted to 16 billion 440 million US dollars in 1~2 months this year, with an increase of only 5.7%.

Over the same period, the largest export province of Guangdong exported 3 billion 520 million US dollars of textile and clothing, a decrease of 11.3%.

In 2007, the total export of China's textiles, clothing and clothing accessories was $167 billion 937 million, up 18.77% from the same period.

The data released by the National Bureau of statistics on 27 may show that in the first 2 months of this year, the textile industry realized a profit of 13 billion 300 million yuan, an increase of 14.2% over the same period last year, much lower than that of 39.5% in the same period last year.

Textile exporting enterprises generally reflect that they dare not take orders at the moment.

On the one hand, the implementation of the labor contract law has increased the labor cost of part of the labor intensive textile enterprises. On the other hand, the appreciation rate of RMB has accelerated this year. For the export enterprises with us dollar denominated prices, the sales profit margin of the textile and garment industry will decrease by 2%~6%, every 1% appreciation of the RMB exchange rate.

In addition, the US sub prime mortgage crisis and the rise in crude oil prices will also affect textile exports.

Due to the changing international trade environment and the gradual loss of domestic manufacturing comparative advantages, Chinese textile enterprises have accelerated the pace of "going out". At present, there are more than 400 Chinese textile enterprises investing in factories in Kampuchea, and nearly 100 in Bangladesh.

The China Textile Import and Export Association recently organized some domestic textile enterprises to conduct a two week inspection in Kampuchea and Bangladesh.

In recent years, as a result of the restrictions imposed by the US and Europe on China's textiles and the appreciation of the renminbi, some Chinese enterprises have invested in neighboring countries to set up factories, so as to avoid trade barriers and reduce production costs by accelerating international layout and pnational production allocation.

"Kampuchea and Bangladesh, which have certain textile industry development basis, attract Chinese textile enterprises to invest mainly in exports to Europe and the United States without quota restrictions and enjoy the most favored nation treatment.

In addition, in order to undertake part of the industrial pfer, these neighboring countries frequently invest in China and offer preferential tax policies, such as Bangladesh's 10 year income tax exemption for foreign-funded textile enterprises.

The industry said, "however, the improvement of the basic supporting measures of these textile industry needs a certain process, which is more suitable for the production of textile and clothing which is not seasonally strong and has a long production cycle. It is not suitable for fashion with strong timeliness."

Jiangsu province's largest textile and garment processing trade item "Xin Lan (Kampuchea) Garments Co., Ltd." was approved by the Ministry of Commerce of China in 2006. The investment entity of the overseas project, Jiangsu AB Refco Group Ltd, invested 16 million 500 thousand US dollars in equipment, raw materials and some foreign currency, and set up an overseas processing trade enterprise in Phnom Penh, Kampuchea, exporting raw materials to Kampuchea for production and then selling it to the European and American markets.

Jiangsu AB Refco Group Ltd responsible person in an interview with our reporter said that the rising cost of the profit margins of China's underwear manufacturers can not afford, so the AB group will put some low value-added underwear in Kampuchea production, which will solve the quota problem and avoid trade barriers.

Chen Huiyong, owner of Dongguan dream Garment Co., Ltd., also told us in an interview with our reporter that due to the rapid increase in manufacturing costs in Pearl River Delta, some friends around him began to set up factories in Vietnam or Bangladesh.

It is understood that the average monthly wage of ordinary textile workers in Bangladesh is only about more than 40 dollars (about 300 yuan), while the average monthly salary of ordinary textile workers in the Pearl River Delta is more than 1000 yuan.

Experts pointed out that Kampuchea and Bangladesh and other countries have relatively low labor force, comparative advantage can also maintain a longer cycle.

In the face of multiple pressures, it is a breakthrough for export oriented textile enterprises to set up factories for overseas investment. Enterprises can consider going out step by step, and the State encourages powerful enterprises to "go out".

//cn.jxmmtv.com/cn