Central Asia is expected to become a hot spot for China’s textile industry transfer
Jul 16, 2019 ｜ by CT
The next five years will be the key period for China’s textile industry to lay out the international market. Not long ago, Duan Xiaoping, vice president of China National Textile and Apparel Council and president of China Chemical Fiber Association, went to Tajikistan, Uzbekistan and other Central Asian countries for research. He said that in the next five years, the speed of machine replacement in China’s textile industry will continue to accelerate, and the level of mechanization will be greatly improved. Some enterprises that have not chosen machine replacement will go global, which will be completed in 3 to 5 years. He hoped that China’s textile industry and the textile industry of Central Asian countries would seize the opportunity to promote exchanges and interaction and win-win cooperation.
Tajikistan is located in the southeastern part of Central Asia, and is an important country along the “Belt and Road”. Duan Xiaoping and Liu Yanwei, vice president of China Textile Planning Institute of Construction, together with Li Jie, secretary-general of China Cotton Textile Association, have investigated the two countries and found that Tajikistan’s textile industry has ample room for development. Local cotton planting area is about 185,000 hectares, annual production of 100,000 tons of lint cotton, of which only 20% is used for domestic production, and 80% of the spun yarn is exported to foreign countries. Uzbekistan regards textile industry as an important industry of national economy and export earning foreign exchange. At present, there are over 3,500 textile enterprises and more than 4,700 garment enterprises in Uzbekistan’s textile industry, with an annual output of 700,000 tons of cotton yarn, 1.2 billion meters of fabrics, 140,700 tons of knitted fabrics, 2.2 billion garments and 132 million pairs of socks. Textile and garment exports amount to USD 1.257 billion (including cotton).
After investigating Tajikistan and Uzbekistan, Duan Xiaoping and his delegation found that Tajikistan relies on abundant water resources to generate electricity, and the cost of electricity consumption is about 0.35 yuan per kilowatt-hour. In terms of employment, the local average wage is low, which is 800 - 1000 yuan (after-tax). Uzbekistan’s energy prices are also very favourable, with electricity charges ranging from 0.25 yuan to 0.28 yuan per kilowatt-hour, abundant labor resources and high quality, with an average wage of about 1,000 yuan per month. On the other hand, Chinese textile enterprises can enjoy many preferential policies in investing in Tajikistan and Uzbekistan. In terms of taxation, Tajikistan stipulates that enterprises can enjoy tax reduction standards of different years and intensity according to the amount of investment. Enterprises investing in Uzbekistan can enjoy preferential customs clearance, every state in Uzbekistan has a free economic development zone, and enterprises investing in the park can enjoy seven years of tax exemption.
Uzbekistan has abundant cotton resources, attractive energy prices, high-quality and cost-effective labor force, coupled with the political stability of Uzbekistan, which is an important hub connecting Europe. These factors will make Uzbekistan one of the important choices for Chinese enterprises to invest.
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