Our country is currently the world's largest textile and apparel production, exporting and consuming countries. In 2014, China's total fiber processing accounted for more than 50% share of the world textile and apparel exports accounted for nearly 37.4% share of the world. In recent years, with the change of domestic and international economic environment, the textile industry is not only the scale of production, export volume and total investment of statistical data appears growth decline, the main export market share decline is also evident, and even some overseas orders began to withdraw from China. In response to these changes, more and more domestic textile enterprises to invest and build factories overseas, while Vietnam is becoming an important destination for Chinese enterprises' overseas investments. Through the transfer of production capacity, with the procurement, production and marketing of globalization has greatly improved the operational efficiency of domestic enterprises.

Dual factors have contributed to the domestic textile industry to "go out"

In 2014, China's manufacturing industry foreign direct investment 19.33 billion US dollars, far more than the same period the amount of attracting foreign direct investment. By the end of 2014, the domestic textile industry has invested more than 2600 textile and apparel production, trade and product design companies in the world more than 100 countries and regions, most located in Asia. Since 2004, about 200 domestic garment enterprises to build a production plant in Southeast Asia.

Trade considerations and cost factors is to promote domestic textile enterprises overseas investment main reason.

Trade factors, some enterprises in order to deal with some European and American countries trade protection measures, such as the Shenzhou Knitting Group has invested early in 2005 set up factories in Cambodia, breakthrough products "origin" of the restrictions, to avoid anti-dumping or "special Paul "could; some enterprises in order to avoid trade barriers, such as Rainbow textile Group in Turkey and Uruguay both put into production and direct sales in the local organization, thus saving these two countries provided 30% of the high customs tariffs; there some enterprises to enjoy special trade policy, the EU declared 2011 as the GSP to the world's most developed countries, many Asian countries have "the list." So if China's exports of clothing to Europe from the need to pay a 12% tariff, while exports from these countries can enjoy duty-free concessions, which attracted many domestic textile enterprises to invest and build factories in Southeast Asia.

In addition to trade considerations, comprehensive cost has become an important factor restricting everyday business, including:

Labor cost. In the textile industry cluster in Jiangsu, Zhejiang, Fujian average annual wage increase in manufacturing employment Case, 2010 - The 2013 three of the data up to 18%, respectively, 16%, 17%; in addition to the natural growth of wages, welfare expenditure in corporate welfare but also because the employment structure changed significantly rising population (employees board and lodging, entertainment and other expenses). At the same time, lagging textile vocational education result in the required skilled workers in short supply, so the rising labor costs and recruitment difficulties into reality.

The cost of land. Most domestic textile enterprises are concentrated in the eastern provinces, with the increase in orders led to the expansion of production capacity, the new plant becomes inevitable. However, the current soaring land prices in eastern China, has exceeded the company can afford.

Raw material costs, mainly referring to the cost of cotton, textile enterprises which occupies the largest proportion of the production costs. From 2011 onwards, in order to increase the income of farmers, China has adopted a large-scale acquisitions of domestic cotton, while quota restrictions on imports of cotton and impose tariffs of up to 40% of the way, leading to a serious shortage of supply of high-quality cotton, domestic cotton three consecutive in more than 30% higher than the international market, directly boosting the sharp rise in production costs of textile enterprises.

Other costs: tax costs, according to a rough calculation from the textile industry, one of the ordinary, the market price of less than $ 100 of clothing, for example, including tax, additional local education, social security funds, including tax and water up to 27.44 %, not including the various administrative fees companies often face; environmental costs, China's energy-saving emission reduction situation is increasingly grim, the new "environmental Protection law" to strengthen the company's environmental responsibility, improve the environmental costs of enterprises; energy costs, textile production demand for electricity is large, and therefore the cost of electricity is costing business highlights, while the domestic price is high is an indisputable fact.

Vietnam is becoming an important destination for foreign investment in the domestic textile enterprises

Keen to invest in the domestic textile industry in Southeast Asia, Vietnam, due to its own characteristics, it is becoming an important destination for foreign investment in the textile industry. These include:

First, sufficient labor resources. Vietnam's current domestic total population of about 90 million, of which approximately 50 million school-age employed population, huge market potential and status of Vietnamese women than men in the labor force to meet the textile enterprises prefer female employees' needs. Although in the past few years, the emergence of the Vietnamese workers' wages are rising fast, but compared with our domestic wage level of $ 500-600, the local average wage of $ 200 is still low.

Second, long-term, sustained and preferential investment policy. Vietnamese government in corporate income tax and land rent, has made significant concessions, such as the "Four Frees and nine half" policy (before the "three free seven half"), that as long as foreign companies employed a total of 5,000 people, $ 300 million investment to break these two conditions can be exempted from corporate income tax within three years from the first profit-making year, after nine years to pay corporate income tax by half, the preferential terms given far more than China's current foreign investment enterprise "two exemptions and three reductions" treatment. And Chinese companies do not need to pay taxes like other urban construction tax, education tax in Vietnam, greatly reducing the tax costs.

Third, the unique geographical advantage. Vietnam at the end of 2006 to join the World Trade Organization (WTO), which is China - ASEAN Free Trade Area members, recently committed to the "Free Trade Agreement" (FTA) negotiations and the "Trans-Pacific Strategic Economic Partnership Agreement" (TPP) of. Early October 2015, 12 countries including the United States, Japan and Vietnam reached a basic agreement on the TPP, agreed to free trade, which means that the future of Vietnam's textile and garment exports to the US will implement zero tariff, will stimulate domestic textile production capacity in Vietnam and gross margin, many domestic textile enterprises to Vietnam ahead of the layout, to prepare for future share dividend policy.

Fourth, other factors. For example, water in China is 3.5 yuan per ton, while in Vietnam is 2.4 yuan, the cost reduced by 31%. Electricity in China is 0.65 yuan per kWh, while in Vietnam, 0.39 yuan, the cost decreased by 40%. Cost of land in Vietnam is only about 20% of domestic enterprises also 3000-4000 yuan per ton cheaper than the domestic price of imported better quality of US cotton and cotton Australia. In addition, compared with other Southeast Asian countries, Bangladesh, Cambodia and Indonesia, Vietnam and domestic political environment is relatively stable, the government encourages open, more determined attitude to attract foreign investment, infrastructure and the legal system has improved steadily, weaker local textile industry, labor relatively high quality but also to attract Chinese textile enterprises to invest in the construction of important reasons.

Domestic textile enterprises to explore business in Vietnam

Vietnam currently gathered from many countries China, Korea, Japan and France, the textile enterprises. Although the number of foreign companies less than normal, but accounted for 60 percent of Vietnam's annual textile and apparel exports, Chinese-funded enterprises contributed greatly. Dong Nai Province, Vietnam attracted the most foreign investment, industrial development in the fastest growing region, at the end of the first quarter of 2015, the province's 31 Industrial Park, a total more than 1000 foreign direct investment projects, attracting foreign investment of about $ 17.7 billion, Rainbow, and Blum Shenzhou and other domestic textile industry in a number of leading companies set up factories here. He said Chinese enterprises have the following important characteristics in the production and operation of Vietnam:

Vietnam subsidiary production line belongs to domestic textile enterprises in new capacity. The current implementation of the "going out" to reduce the domestic textile enterprises basically no original production, on the one hand, the transfer of production capacity to some extent to meet Foreign overseas customers. As Shenzhou International Group is a knitwear manufacturer Valet Original (OEM), and its main customers include Adidas (Adidas), Nike (Nike) and Uniqlo (Uniqlo) and other famous brands. In recent years, above all in the past will gradually brand supplied by the Chinese mainland orders split into each half Mainland and overseas, in order to maintain long-term customer relationships with large companies were forced to move with the orders of new capacity; the other hand, new capacity external transfer did not reduce reliance on the Chinese market. A lot of investment capital in Vietnam in the textile industry, such as the Rainbow Group, most of its cotton yarn will be sold back to China, reflecting the mainland consumer market potential yet to be improved.

The overall technological level is higher than the domestic parent company subsidiary in Vietnam. Chinese investment in Vietnam textile enterprises are mostly in the domestic A share market, the strength of adequate funds, so to greenfield investments, mainly in the investment scale and design production capacity far more than South Korea, Japan and other countries counterparts; the other hand, Vietnamese government for production of key mechanical products and services in investment and production focused on machinery projects imported equipment and materials zero tariffs, so Chinese enterprises have imported the most advanced production line equipment from Europe by increasing the degree of mechanization to reduce the Vietnam labor quality is not high impact on production.

Domestic textile enterprises to invest in Vietnam, "the whole industry chain transfer" phenomenon evident. For example Blum Oriental to invest and build factories in Vietnam shortly after the downstream industry chain of Shenzhou International, Shandong Lutai States and Taiwan equality fabrics and textile enterprises have been transferred so far. The above phenomenon is mainly based on two reasons: First, Vietnam's textile industry overall strength is not strong, the whole industry chain layout is not balanced, mainly in garment manufacturing, lack of supporting industries to provide local enterprises funded enterprises; second is the United States in the TPP insisted that "yarn priority" (yarn-forward) rules of origin, which requires zero-tariff access to the US textile and apparel market, the production of raw materials from yarn to fabric, the process from cutting to sewing must TPP completed in the territory of the member States, it has also become an important factor in a large number of textile enterprises have moved to Vietnam. Currently Tianhong Group has invested in the construction of a northern Vietnam province of Quang Ninh an area of 3300 ha large industrial park, industrial park planning has mainly fibers, spinning, weaving, dyeing and mechanical manufacturing. Youngor Group also plans to invest one billion yuan level of Vietnamese industrial park project, fabrics and other capacity to serve within the park. In the future industrial park will be formed within the above-funded enterprises to build all of the Central complete industrial chain, both to meet the relevant provisions of TPP, but also greatly improve the overall profitability of China's textile industry.

Attention to localization management is a common practice in Vietnam various subsidiaries. Research found that a high degree of Vietnamese Chinese textile enterprises in localization, the vast majority of employees are from the local recruitment. At the same time an appropriate increase in the proportion of Vietnamese staff management has also become common practice various Chinese companies, for example, in Rainbow Nhon Trach company from the manufacturing floor to the corporate management team with team members can see the figure of Vietnamese workers, company management efficiency has been greatly improved. In addition, Chinese companies pay slightly higher than local enterprises, the company returned to local staffing staff quarters, canteen and free medical care and other benefits, the Vietnamese general staff job very seriously.

Reflections on the domestic textile industry "going out"

Some media had thought that textile and garment industry is not high technology content, limited room for innovation, poor profitability, is representative of a "sunset industry". However, Uniqlo Japan's richest man and chairman reelection ZARA founder fact become the richest man in the world coming to reveal the current China's textile industry has profit potential there is huge room for improvement. To achieve power to transform the textile industry textile powerhouse, should as soon as possible by means of new ideas, new technologies and new models for the domestic textile industry to transform the "transfer" to promote "transition" to improve competitiveness of the industry.

(A) to grasp the laws of economic development, early fully prepared

Reviewing the development of America and Japan in developed countries is not difficult to find, promote industrial costs Forced transfer is a normal economic phenomenon. With living space regions of the growing importance of high-tech industry, textile and garment industry and other traditional labor-intensive industries are shrinking, thus selectively migrate to the industrial transfer costs through efficient allocation of resources, market development, production and processing sectors Region near the lower end of the market, the parent company to increase investment in new product design, development and marketing and other aspects of the "smile curve" at both ends of the climb, this is an effective way to promote industrial upgrading.

Despite some initial overseas investment of textile enterprises have established a successful case for the domestic counterparts, we have accumulated valuable experience. If, however, the lack of adequate preparation, ignore enterprise risk management and control, industrial external transfer failure probability is still large. Companies need to "go out" preparations made include: due diligence and feasibility analysis of investment target country. Includes not only the productivity of labor, industrial chain, and water and electricity costs and other factors, we must also fully understand the local legal system, culture, customs and political environment and other factors, in order to make a comprehensive evaluation. Such as Zhejiang Kohl Group invested 218 million yuan in the United States to establish a production base in South Carolina, although the local Chinese labor costs are more than three times, but can be in raw cotton, cotton and other aspects of power Zhaobu back, while the use of local developed logistics industry, but also greatly reduce the cost of cotton warehouse; personnel reserve for overseas investment. Has a number of foreign language skill, excellent business, know how to manage high-quality talent is the "going out" an important safeguard, in particular know how to manage skills in daily communication and coordination with the parent company's decision-making arrangements for the host government is very important.

On the other hand, not all are suitable for domestic enterprises to "go out." As China's largest cotton spinning enterprises Weiqiao Textile Group always adhere to the production base to stay in northern Shandong plain, over the years to rely on industry chain integration and effective means of employee motivation is equally obtain a higher profit margin.

(B) the dialectical understanding of trade rules, a positive response to the changing situation

In today's highly developed economic globalization, a country's industries only fully participate in the international division of labor, cooperation and competition, accelerate the process of internationalization of enterprises, have more opportunity to improve position in the global value chain. The current development of China's textile industry is facing both from the domestic costs surge, financing and export slowdown hindered pressure, but also from developing countries in order split and European markets high tariff barriers "double squeeze." Therefore, to accelerate and promote the strength of the enterprises to "go" to achieve the transfer of foreign industry should form a consensus in the textile industry in China. Encourage industry leaders and the Government to strengthen cooperation in the construction of industrial parks, to avoid going it alone, to stimulate domestic industry, supporting small and medium enterprises bear "borrowed boat", the formation of scale and hold together, in order to improve the success rate of foreign industrial transfer, this is the Taiwanese company summed up the successful experience of foreign metastasis. Up to now, there have been more beautiful Group (Nigeria), Rainbow Group (Vietnam) and red beans Group (Cambodia) and other stronger companies overseas to establish a number of textile industrial park, which other domestic textile enterprises "going out" strategy to reduce the risk.

In the industrial external transfer process, companies should also grasp market information, dialectical understanding of international trade rules. Such as TPP agreement will take effect in the short term to bring China's trade diversion effect, by the impact of tariff reductions and rules of origin, the United States and Japan prefer imported from TPP member countries in the future, so that our country suffered losses of trade diversion. At the same time, TPP agreement not only improve the standard of intellectual property, but also the addition of labor and environmental provisions, linked with trade, they are likely to become the future way of non-developed countries to developing countries, members of the TPP impose trade sanctions. However, it should be noted, high standards and new rules for TPP represents the direction of economic globalization, domestic companies only prepare in advance a positive response, we strive to compete in the future through the integration of design and development of domestic and foreign brands and channel resources, and gradually to the global value chain of high-end climbing, production and global sales of rational distribution.

(C) the technological revolution to seize the opportunity to promote the transformation by means of transfer

China's economy has entered a new normal today, with information technology as the representative of a new round of technological revolution for the transformation of traditional manufacturing industry provides an opportunity. Development of China's textile industry should advance with the times, with the global industrial transfer opportunities, relying on new ideas, new materials and new technology to promote industrial upgrading.

Current "Internet +" concept is a profound impact on manufacturing various categories, which expanded the scope of the subject of innovation, expanding from a single enterprise to industry alliance composed of more than one business, it can through digital control, machine-to-replace people at the same time also greatly enhance the efficiency of labor. Many domestic textile enterprises due to existing production machines have not finished the expected useful life, beset by yet to recover investment costs, has been reluctant to completely replace more productive machinery and equipment, industrial external transfer now just provide a good opportunity. Transferred to developing country textile companies can use lower tariff price of imported advanced production equipment, through the step by step construction of intelligent and digital factory production line, integrating all aspects of the industry chain of intelligent management, not only to relieve the host country art Effect of shortage of the production, but also to adapt to the downstream FMCG brand development trend and meet customer personalized, differentiated demand for small orders, expanding the potential consumer market.

"Green manufacturing" concept also affect the future direction of the domestic textile industry. Past the textile industry is often regarded as "high energy consumption, high pollution" on behalf of many companies in order to increase profitability not want too much invested in environmental protection. From January 1, 2016, the new "Environmental Protection Law" was implemented to improve the environmental protection requirements, and increased penalties for illegal sewage companies. In fact, attention to environmental protection, green manufacturing is to achieve a consensus of governments. As the level of economic development of our country is not as Vietnamese government for all foreign companies made rigid requirement that the sewage treatment system must meet the Class A level, otherwise project application shall not be approved. Therefore, encourage enterprises to "go out" Forced domestic industry restructuring is gradually becoming a reality. On the other hand, the use of advanced energy-saving equipment and technology to reduce the number of emissions of pollutants and reduce the production of water and energy consumption, green manufacturing throughout the entire production process can also help to increase the value-added textile products, based on a breakthrough EU environmental standards set by non-tariff barriers, and ultimately improve profitability.