Chinese textile industry foreign investment present situation and characteristic analysis

Since joining the World Trade Organization (WTO), Chinese textile industry actively integrate into the globalization trend, using international resources form from "introduction" to "Going-out", foreign investment has made great progress. In particular, the "Belt and Road" Initiative has been put forward, and a series of trade and investment facilitation measures have created conditions for the textile industry to carry out foreign investment, which has the following characteristics.

Steady progress has been made in outward direct investment and deep integration with the global textile supply chain

Since the 13th Five-Year Plan (2016-2020), the scale of outbound investment in China's textile industry has been expanding, covering the whole industrial chain from upstream raw materials such as cotton and pulp, to intermediate products such as cotton spinning, wool spinning and chemical fiber manufacturing, and to terminal clothing, home textile products and textile machinery. Under the circumstance that the supply of domestic production factors is tight in an all-round way, Chinese textile enterprises establish raw material bases, processing factories, brands, channels and R&D centers overseas through greenfield investment, capital operation and other ways, actively build transnational industrial chain and value chain system, and constantly improve the efficiency of resource allocation.

Through trade and investment cooperation, China has gradually established a complementary and interactive textile industry structure with Southeast Asia and Africa, and formed a more efficient industrial chain cooperation relationship. Textile fabrics produced in China provide upstream product support for garment processing in Southeast Asian countries. A considerable part of yarns produced in Vietnam and other Southeast Asian countries enter China for back-channel weaving, dyeing and finishing processing, becoming an indispensable raw material supply for China's textile industry chain. Some clothing products produced in Southeast Asia and South Asia have also entered the Chinese market, providing Chinese residents with more high-quality and inexpensive consumption choices.

Regional distribution of overseas investment continued to improve

In recent years, the production bases invested overseas by Chinese textile enterprises have formed the overall layout of "Mainland China + Southeast Asia/Africa". Southeast Asian countries such as Vietnam, Cambodia, Myanmar, Malaysia, as well as African countries represented by Egypt and Ethiopia are the regions with the most intensive overseas investment and construction production bases of Chinese textile industry. Because of its high-quality cotton resources and abundant low-price power resources, the United States has also attracted Chinese enterprises to invest in the construction of digital and intelligent cotton textile factories, and is a major developed country in the overseas investment of our textile industry.

During the "13th Five-Year Plan" period, Lancang Mekong River (Vietnam, Myanmar, Cambodia, Thailand, Laos) countries have similarities with China's textile industry in factor endowment, industrial level, export market, product structure and other aspects. With relatively low cost of production factors, rich labor resources, preferential export tariffs to developed regions and other advantages, Become an important force for Chinese textile backbone enterprises to develop new production capacity investment. In November 2020, 15 countries including China, Japan, the Republic of Korea, ten ASEAN countries, Australia and Singapore formally signed the Regional Comprehensive Economic Partnership (RCEP), providing further market space for China's textile industry to carry out overseas investment and continuously promote international production capacity cooperation.

The establishment of a transnational resource allocation system has been accelerated, and high value-added features are becoming more prominent

While maintaining a stable competitive advantage in the traditional manufacturing field, the Chinese textile industry in recent years has extended its supply chain to high value-added fields such as fiber materials, high-end manufacturing technology and brand channel by actively developing the global vertical industrial chain layout and high-quality resources integration. In terms of textile raw materials, for example, Hengshen Group acquired Forbonte caprolactam factory in Holland, and Fulida Group acquired Neucier Dissolving pulp Company in Canada, which enhanced the ability to guarantee high-quality textile raw materials. In the aspect of high-end manufacturing, for example, China Hengtian Group acquired the world famous printing and dyeing equipment manufacturer, Hong Kong Lixin Industrial Co., LTD., which made up for the shortcomings of dyeing and finishing links and promoted the rapid improvement of Hengtian Group's comprehensive capacity of dyeing and finishing equipment. In terms of technology research and development, for example, Suzhou Tianyuan Clothing Co., Ltd. uses advanced technology in the United States to build a fully automated T-shirt production line in Arkansas, which significantly improves its technological advantages. In terms of brand and channel extension, for example, Anta Sports has acquired FILA, Kolon Sport and other middle and high-end brands.