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Will Central Asia be the next hot area for textile and garment industry transforming?

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 conduct research on local investment situation and cost factors. Liu Yanwei, vice President of China textile construction and planning institute, Li Jie, secretary general of China cotton textile industry association, textile branch of China council for the promotion of international trade and representatives of domestic enterprises investigated together.Tajikistan, located in southeastern central Asia, was one of the first countries to respond to the "One Belt And One Road" initiative.Tajikistan is rich in natural resources, with a complete range of minerals and large reserves. Its water resources account for about 60% of the entire central Asia, ranking eighth in the world.Local cotton planting area is about 185,000 hectares, with annual output of 100 thousand tons of lint, of which only 20% is used for domestic production, and 80% of the spun yarn is exported to foreign countries, in general, the textile industry has plenty of room for development.

On the first day of arrival, chairman Duan Xiaoping and his delegation met and talked with the first deputy minister of the ministry of economy and trade of tajikistan amin and other relevant departments.Chairman duan expressed the purpose of the delegation. First, the importance of the textile industry in China was illustrated through a set of figures.Secondly, this paper introduces the challenges and difficulties at present China's textile industry, one is the population aging speed, reduce the effective labor force, wage labor advantage gradually faded, secondly, the sino-us trade friction loss of international orders, some customers prefer to choose products of China's enterprises overseas factories to avoid risk;At the same time, to tower inspection, investment is also in line with the "One Belt And One Road" initiative.

The first deputy minister of the ministry of economy and trade of tajikistan amin said that stepping up investment is the only way to industrialization. The final development goal of tajikistan's textile industry is to complete the entire industrial chain from cotton planting to textile and garment manufacturing, and the products will partly meet domestic demand and the rest will be exported to foreign countries.At present, most of the garments are exported as semi-finished products and produced in China. I hope that the China textile association and its delegation can bring more cooperation opportunities to tajikistan.

According to the introduction, the main advantages of tajikistan's elements are energy, labor, raw materials, taxes and so on.In terms of energy, it relies on abundant water resources to generate electricity at a cost of about 0.35 yuan/KWH.In terms of employment, the local per capita wage is relatively low, about 800-1000 yuan (after tax). Not only that, the local government also adds textile majors in universities to ensure the demand for professional talents.In terms of tax, according to the size of the investment amount, tax reduction standards of different years and intensity can be enjoyed. Encouraging export is the national development strategy goal, and export can enjoy relevant tariff reduction.In terms of financial conditions, there is no restriction on the repatriation of investors' earnings from tajikistan.

This time, the delegation also came to zhongtai (dengara) new silk road textile industry co., LTD., to understand the first-hand experience of enterprises in tazhong.The company plans to build a total of four stages, including the first stage of 60,000 ingots combing compact spinning, the second stage of 5760 head air spinning has been successfully put into production, the third stage and the fourth stage respectively planning the construction of knitting, dyeing and weaving projects.Phase I project is equipped with first-class imported Swiss rieter equipment and international advanced standard monitoring instruments.

According to the introduction, the local cotton quality is relatively good, but the horse value is slightly higher, the spinning of high count yarn is limited, the country's mountains account for about 93%, geographical location and transportation facilities and other transportation costs need to be fully considered before investment.The entry of China and Thailand has made great contributions to improving local employment, improving living standards and increasing taxes. The two countries have won many prestigious awards, such as "best tajik industrial product award" and "outstanding tajik industrial enterprise award" in tajikistan.In the "One Belt And One Road" initiative, it was selected into the "One Belt And One Road" international cooperation summit BBS achievements list.

Regarding the international layout trend of China's textile industry, Duan Xiaoping, chairman of the board of directors, said that the recent five years will be a critical period.Second, in the past five years, China's textile industry will continue to improve the speed of machine replacement, mechanization level will be greatly improved, some enterprises will choose not to replace the machine will choose "go out", this decision will be completed in 3-5 years.It is hoped that both sides can seize the opportunity to fully promote exchanges and interaction and promote win-win cooperation.
On May 2-6, Duan Xiaoping, vice President of China textile industry federation and President of China chemical fiber industry association, led the central Asia delegation to uzbekistan, the second stop, to investigate the local textile industry investment and development prospects.

Uzbekistan, located in the hinterland of central Asia, is an important fulcrum of "One Belt And One Road" construction. It is rich in natural resources. In the past five years, its GDP growth rate has maintained above 7%, and its economic and trade environment is good.At present, there are more than 3,500 textile enterprises and more than 4,700 garment enterprises in the light textile field of uzbekistan, with an annual output of 700 thousand tons of cotton yarn, 1.2 billion meters of fabric, 1407 thousand tons of knitted fabric, 2.2 billion pieces of clothing and 132 million pairs of socks, and the export value of textile and clothing is 1.257 billion us dollars (including cotton).It is worth noting that in the process of the development of uzbekistan's textile and garment industry, the President made it clear that uzbekistan would stop exporting cotton from 2020, indicating uzbekistan's determination to transform itself from a traditional cotton producer into a textile country.

According to the report, the country's energy prices are very generous, with electricity charges ranging from 0.25 yuan to 0.28 yuan per kilowatt hour (the same as below), natural gas 0.48 yuan per cubic meter, water charges of 1.8 yuan per cubic meter and waste water treatment fees of 0.9 yuan per cubic meter.The country has 11 years of compulsory education, abundant labor resources and high quality. The average salary is about 1000 yuan/month (before tax).
As the final stop of the central Asia tour, the delegation held talks with uzbekistan textile and garment association, investment committee and other departments to exchange views and Suggestions on the development of Chinese textile enterprises in uzbekistan.
During the meeting, fakhruddinjumaniov, deputy director general of uzbekistan textile and garment association, introduced the existing preferential policies and industrial development directions for uzbekistan.

Preferential policies
1. Enjoy customs clearance privileges;
2. Each state in Ukraine has a free economic development zone. The investment in the park can be exempted from all taxes and fees (except individual income tax) for 7 years.The amount of investment is more than 50 million us dollars. The energy needed is transported free of charge by the state and the tax exemption period is extended from 7 years to 10 years.
3. The annual cotton output of Ukraine is about 1 million tons. If you buy the cotton produced in 2017, you can enjoy a 15% discount.
4. The local cotton processing equipment is outdated. Meanwhile, 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 the production demand and reduce the production cost.It is reported that the cost of enterprises to grow their own cotton is about $900 / ton, while the market procurement needs $1,500 - $1,600 / ton.In addition, 60 percent of the cost of growing cotton will be borne by the state.If drip irrigation technology is used, the state will subsidize it by 50%.

5, the use of domestic cotton finished exports enjoy 20% export tax rebate.
Industry development
1. In the future, 70% of the cotton planting land will be allocated to enterprises for independent planting;
2. Focus on industrial upgrading. Since 2016 when enterprises were called upon to upgrade equipment, over 80% of enterprises have completed equipment upgrading within two years;
3. Privatization of state-owned enterprises has been completed step by step. Uzbekistan textile and garment association is stepping up cooperation with international colleges and universities.
4. Currently, there are about 70 countries exporting Ukrainian products. With the continuous development of its textile and garment industry, Ukraine plans to expand its exports to 90 countries.

5. After stopping cotton export in 2020, from 2020 to 2025, it will further guide the transformation of export products to the downstream, reduce cotton yarn export, and keep more added value of products in China;
6. Currently, the links of printing and dyeing and chemical fiber of Ukraine are relatively weak. Relevant enterprises are welcome to enter. Duan xiaoping, vice President of China textile industry federation and President of China chemical fiber industry association, said in the meeting that the visit to Ukraine has yielded a lot of harvest, which has increased the confidence of Chinese enterprises in investing in Ukraine. Liu Yanwei, vice-president of the China academy of textile construction and planning, introduced the results of the visit.China's textile enterprises to go out is their own development needs and jointly contribute to the results of the external environment and Ukraine has rich resources of cotton, attractive energy prices, high quality, cost-effective workforce, plus the uzbek political stability, but also important hub linking Europe, these factors will lead to Ukraine have become one of the important choice of Chinese enterprises.

China cotton textile industry association secretary-general, said Li Jie communication association member enterprise covers more than 70% of the China cotton textile production capacity, has nearly 10 times a year industry exchanges, China cotton textile industry association and the China council for the promotion of international trade textile branch is willing to both sides to build communication platform, in the negotiation activities organized investment, continuously for companies interested in the opportunity to visit.
The delegation also visited two representative industrial parks invested by China and a spinning enterprise invested by a Turkish company in Ukraine.
Pengsheng industrial park, invested and constructed by wenzhou jinsheng trading co., LTD., has been under construction since 2009 and was rated as China's national overseas economic cooperation zone in 2016.By the end of 2017, pengsheng industrial park has invested a total of 138 million us dollars, and 16 Chinese enterprises have settled in the park, covering ceramics, valves, mobile phone manufacturing, casings, leather, steel rolling and other fields.In cooperation with the cotton research institute of the Chinese academy of sciences, the park has carried out a pilot cotton planting project, and plans to focus on the development of modern agriculture, light textile, knitwear and other fields in the future.At present, there are more than 1,500 employees in the park, and 85% of them 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 relatively good.

Jinsheng group invested and established the uzbek industrial park on the litai silk road in kalhi, uzbekistan. The investment agreement of this project was signed in 2014. The phase I project of 120,000 ingots compacted 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 spindle modern spinning and 150 looms project is expected to be put into production in the first quarter of 2020.Jinsheng group also plans to set up an industrial park in tashkent, the capital of uzbekistan. An agreement of intention has been signed and the project is under approval. Meanwhile, it plans to start cotton planting business in uzbekistan in 2020 to meet the production demand.The representative of the enterprise said that Ukraine 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 join hands on the development pole day of Ukraine.
The delegation also visited bakken textile, invested and built by a Turkish company with a spinning capacity of 63,000 ingots. The main products of the company are 20-30 pieces of pure cotton yarns, which are spun at the front and the back with the full process automation equipment of telu and jinsheng respectively.

In the end, chairman Duan Xiaoping summarized the visit to uzbekistan and put forward Suggestions.It is hoped that Ukraine could carefully take administrative restrictive measures. For example, restrictions on cotton yarn export should not be taken lightly. The development of industrial chain needs time.It is hoped that the import of auxiliary materials needed by downstream industries can be encouraged, not only in terms of tariffs, but also in terms of reducing administrative examination and approval procedures and related additional costs, so as to promote the downstream industry chain to be formed as soon as possible.In addition, in the process of park development, it will be more convenient for Chinese enterprises to communicate with the parks built by Chinese enterprises, and they will be more inclined to choose Chinese parks, especially those built by Chinese textile enterprises. It is hoped that Ukraine can accelerate the construction of relevant parks.In the past five years, a critical period for Chinese textile enterprises to "go global", 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 investment country, protect the interests of both sides, and create a new model of win-win cooperation.



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