Southeast Asian Countries Are Investing Heavily In A Bid To Systematically Compete For The Share Made In China.

When Chinese enterprises, especially state-owned enterprises, are competing for money in all parts of the country, the United States and Japan are competing with Vietnam, India and even more Southeast Asian countries to compete for the market share of China's manufacturing industry.

Recently, a merchant shipping company Mitsui, Japan's largest shipping company, invested $1 billion 200 million to expand its container terminal in Vietnam, and Mitsui thought that the manufacturing industry will accelerate the pfer from China to Vietnam and other Southeast Asian countries.

This is not alarmist. Not only Japanese companies have increased investment in Vietnam, but also many Chinese manufacturing enterprises are moving their capacity to Vietnam.

Bakery finance has examined several listed companies' earnings reports: with the help of developed countries such as the United States and Japan, Vietnam, India and many other Southeast Asian countries are systematized through trade.

And land concessions and other strategies "dig corners" made in China.

Preferential tax and cheap land: Vietnam and other countries copy China's investment practices

Vietnam's policy of "preferential" for foreign investment is quite large, and some investment policies which have been well used by local governments in China are widely used by Southeast Asian countries such as Vietnam, Indonesia and Laos.

Many Chinese enterprises began to enjoy preferential policies that they had enjoyed in the country or did not enjoy in Vietnam.

Tax preferences are regarded as a weapon for attracting investment.

Liu Yonghao's new hope (000876.SZ) annual report shows that the preferential tax rate for new hope in Vietnam's Hu Zhiming is exempt from 3 years, which is reduced by 5 years. In Vietnam, Hanoi's main business income tax rate is 10%, while the local normal income tax rate is 22%. The benefit of the same tower in Vietnam is that the income tax rate is 15% (normal duty rate is 22%) within 12 years from the start of business activities.

The new tax incentives in Laos are exempt from the 5 year income tax from the year of profit.

China's cooperation with Singapore in setting up parks was also followed by Vietnam.

Vietnam and Singapore jointly established the "Vietnam Singapore Industrial Park" in the coastal defense area. The tax rate of the enterprises in the park is quite favorable: the income tax is levied at 10%, less than half of the statutory tax rate. The export enterprises are exempt from the first 4 years, and the latter 9 years are reduced by half, with a tax rate of only 5%.

China's A share listed company, 603558.SH, has set up factories in Vietnam and is investing more locally.

Motorcycle companies, which were repeatedly suppressed by the "anti lock" policy, were courteous in Vietnam.

The announcement of Zong Shen power shows that enterprises in Hanoi industrial park can enjoy the income tax policy of three years exemption and seven years reduction from the month of realization of profits.

In addition to taxes, low land prices have also become a bargaining chip for Vietnamese investment.

Tianhong textile said in its earnings report: Its Industrial Park in Guangning, Vietnam, covers an area of more than 67 thousand square meters, and the original price is only 250 yuan per square meter.

Moreover, this includes the cost to the Vietnamese local government, the cost of land acquisition and the cost of building the infrastructure on the block.

In addition to Vietnam, Southeast Asian countries such as Indonesia, Kampuchea and Laos also carry out various preferential policies.

Lu Tai, a textile enterprise, said: "Kampuchea (A) enjoys a tax exemption from enterprise income tax exemption for the 3 year starting period of +3 +1 tax exemption period".

China's manufacturing costs have risen sharply, and no profit has been pferred.

Chinese manufacturing enterprises have to go abroad to set up factories, which has a great relationship with the increase of domestic labor costs and the burden of taxes and fees.

In 2015, the absolute value of labor, depreciation, energy and manufacturing expenses in the production of shirts is rising.

Labor costs have risen dramatically.

According to the results of the report, in 2012, the proportion of manual wages in Ru Tai's shirt cost was 29.35%, climbed to 39.10% in 2015, and increased 10 percentage points in two years.

"2015 is a year of deep adjustment in China's textile industry," Baron said in its earnings report.

Domestic enterprises are facing the decline of cotton quality, the existence of excess capacity structure, low utilization of equipment, high inventory of products, difficulties in capital turnover, and the continuous rise of domestic labor costs, and many other unfavorable factors. On the international side, the textile industry in Southeast Asia has developed rapidly, and continues to seize the share of China's textile industry with its obvious advantages of low cost. "

The competition of manufacturing industry is largely the competition between cost and scale.

For the low profit clothing industry, such a sharp rise means that if it does not move, it will fall into an unprofitable situation.

Manufacturing industry accelerates to migrate China's exports

The speed of manufacturing migration to Southeast Asia is beyond imagination.

A shares listed companies in 2013 started construction in Vietnam, and last year Vietnam's spindle production capacity accounted for 40% of the company's total capacity.

According to the financial data, because it was identified as a high-tech enterprise, the company enjoyed a preferential income tax rate of 15% in the country last year, while Vietnam's tax rate was only 10%.

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The production lines of Adidas and Nike are also accelerating to leave China.

Yuyuan group (0551.HK) listed in Hongkong is one of the largest footwear manufacturers in the world, with sales revenue of over 55 billion yuan last year, and its OEM brands include the main sports brands such as Ali and Nike.

In 2009, Yuyuan group's production line in China accounted for nearly half of the global production line, but by 2015 China accounted for only 25% of the total production volume, while Vietnam accounted for 42% of the total production volume, while the Indonesian production line accounted for 32%, which surpassed China.

The rapid shift of China's manufacturing industry to Southeast Asia has been reflected in export data, especially textile and clothing industries.

The figures below are the export data of Chinese clothing, footwear and textiles in recent years based on official statistics, and the detailed data of each category can be obtained by "Browse" on the bread and butter WeChat public address (ID:mbcaijing).

Statistics show that in 2015, the exports of these three categories of products all appeared the first decline in recent years.

The total export volume of the three categories of products is about US $335 billion 500 million, a decrease of about US $15 billion over the previous year.

China's textile and apparel industry has dropped in proportion to the international market share, while the share of Southeast Asia and India's share in the international market is increasing.

Statistics show that the market share of Bangladesh textile and garment industry in the EU increased by 1.80 percentage points in 2015, and the market share of Vietnam's textile and garment industry in the United States and Japan increased by 1.08 percentage points and 1.55 percentage points respectively in 2015.

In 2015, the market share of India's textile and garment industry in the United States and Japan was also rising.

The shift of China's manufacturing industry is not confined to industries such as textiles and clothing. Some of the more sophisticated electromechanical manufacturing industries are also flowing out of China.

China's export of automatic data processing equipment and components has been declining. Last year, it accelerated its decline.

Statistics show that the decrease in 2015 was 15%, and the previous two years' decline was 1.7% and 1.3% respectively.

Even many parts of HUAWEI need to be pferred to Southeast Asia.

Ren Zhengfei previously accepted an exclusive interview with Xinhua, saying that "before HUAWEI bought these parts, we all paid RMB to pick up goods in Dongguan. Now it is Fu Meijin who has picked up goods in Southeast Asia".

Ren Zhengfei believes that the first priority of China's current reform and opening up is to reduce taxes.

United States and Japan join hands in Southeast Asia to attack China.

Many enterprises invest in Vietnam and other Southeast Asian countries not only because of preferential policies and cost factors, but also in the European and American markets, such as trade barriers in China, abundant labor force and exchange rate in Southeast Asian countries.

Jian Sheng group disclosed in its earnings report that investing in factories in Vietnam has become an effective measure to resist trade barriers in the textile industry.

At present, China's export of cotton socks to Japan, Australia and the United States will be subject to 7%, 5% and 14% import tariffs respectively, while Vietnam's export of cotton socks to these countries is exempt from customs duties.

Although the population and market size of a single country is much smaller than that of China, Southeast Asian countries, especially ASEAN countries, have a huge population and market size as a whole. Data from the World Bank show that there are nearly 600 million people in the ten ASEAN countries.

GDP per capita and infrastructure are better than India. The huge labor force is enough to make China's manufacturing industry take root in ASEAN.

TPP, Vietnam and other Southeast Asian countries, which were jointly signed by the US and the Asia Pacific countries, are considered to be the biggest beneficiary countries.

In 2015, Vietnam's gross domestic product increased by 6.7%, which was higher than the 6.2% growth target set by the Vietnamese government. The main driving force came from the growth of foreign direct investment by 17%, creating a record high of 14 billion 500 million dollars.

If coupled with India, China's manufacturing industry will face long-term and fierce competition in Asia alone.

In 2014, the population of India was 1 billion 295 million. Half of the population was under 25 years old. Every year, tens of millions of young people joined the workforce. The per capita GDP was 1570 dollars, which is very close to China's per capita GDP in 2005.

Modi, Prime Minister of India, held the banner of "made in India" at the Manufacturing Expo held in Mumbai. "We want to make India a global manufacturing center. We are paying attention to improving the business environment in an all-round way. We are also streamlining the procedures for business licenses, safety and environmental approvals," he said.

According to previous reports, Foxconn has set up factories in India to manufacture iPhone.

When the manufacturing industry is faced with various pressures at home and abroad, China's second tier cities are entering the era of land King's frequent emergence, and a large amount of capital and resources are solidified on the land.

Statistics show that: since the beginning of this year, the 22 key cities, such as northern Guangzhou and Shenzhen, as well as hot second-line cities such as Nanjing, Suzhou and Hefei, have generated a total of 113 of the total price, unit price or premium rate.

Isn't it worth waking up when it's cold and hot?