History proves that some countries and regions benefited from international industry transfer, because of international industrial transfer can stimulate their economic growth.

Thanks to the manufacturing transfer implemented by EU, USA, Japan and some Asian developed countries in 1980s, China¡¯s economic situation has boomed over 30 years.

  Textile industry as a traditional industry in China has its own competitive advantage. It can be confirmed that textile industry will play an important role during the fourth Industry transfer period. So, who will be the winner this time?

Eastern Textile Enterprises accelerate their Industry Transfer

  There are three major international industrial transfers occurred during 1950s till 1990s; and now, China is trying to transfer some of its domestic industries from eastern regions to mid-western regions or oversea regions. So this time can be considered as the fourth international industrial transfer.

  In fact, many factories transferred their business to China¡¯s mid-western part loathly, local rising cost and limited development space drove them on the way western. The terrible situations forced them to adjust their strategies. Pearl River Delta area was famous for its prosperous textile industry, there used to be a lot of textile enterprises there. However, the industrial transfer causes these plants to move to Mid-western part of China. Enterprises in Pearl River Delta area should face the crisis and try to resolve it.

  Many textile enterprises play as pioneers during this industry transfer. For instance, Progen Co. Group (Zhejiang province) plans to transfer to Yichang, Hubei Province. Some enterprises in Xiangshan, (Zhejiang province) plan to transfer to Poyang, Jiangxi province. Ruyi Group (Shandong province) invested four billion Yuan to build a world biggest compact spinning base in Hubei Province. Sanmao Group (Shanghai) settled in Chongqing, meanwhile, Huafu textile Co. Group (Zhejiang) purchased Aksu textile factory.

  In this transfer process, many enterprises in Zhejiang province turned their investment attention to Xingjiang textile market. For instance, recently, two Socks manufactories in Hainin, Zhejiang province achieved a cooperation agreement in Xingjiang province, in order to set foot in this new market.

Mid-West Attracts Investment

  It is a good news for those provinces in China¡¯s mid-western part. Industrial transfer will bring a lot of economic benefits to these provinces; meanwhile, it also will provide excellent developmental opportunity to them. Attracting investment from Eastern part is the first step for Mid-Western province to implement.

  Hubei province was renowned for its competitive electric resource and favorable investable environment. This province prepared for this industrial transfer at the beginning of 2008. It built an Industrial Zone in Yichang city in order to attract investment of Shenzhen. The government leaders of Hubei Province also play an important role in attracting investment.     They went to some developed regions such as Guangzhou, Shenzhen, Dongguan for the purpose of attracting investment. Whilst they also pay attention on organizing exhibitions, there were more than twenty exhibitions organized by Hubei Government in Shenzhen city. The Hubei Government and its merchant delegation built a good relationship with some domestic big listed companies through these exhibitions, meanwhile, they also communicated with some Fortune 500 companies deeply in the exhibitions.

  Take Xinjiang province for another example, its invite-investment plan focused on Zhejiang province. According to the report of Zhejiang-Xingjiang Enterprise Association, there were 160,000- 180,000 Zhejiang merchants who invested in Xingjiang province from 2002 till now. These enterprises offered huge employment opportunities to Xiangjiang province and contributed 100 billion Yuan to Xingjiang¡¯s economy. Changji (Xingjiang province) signed three contracts with Zhejiang textile enterprises in the middle of the march 2009, the total amount of investment reached to 0.3 billion Yuan.

  Anhui Province as front line of China¡¯s Middle part has a population of 67 million. The annual textile and clothing consumption reached to 35 billion Yuan. Anhui province considered as a preferred place to settle because it has rich human resource, convenient transportation, perfect infrastructure and cheap land price. Some eastern textile enterprises such as Tristate Holdings Co., Ltd. (Hongkong), Hualun textile Co., Ltd., Taizi Dragon Co., Ltd, JOE/ONE Co., Ltd. and Busen Group Co., Ltd. settled here. Take Hefei for an instance, there were 69 clothing enterprises that invested 1.621 billion Yuan and settled there in 2007. In 2007, the total fixed assets investment of textile and closing industry in Anhui reached to more than four billion Yuan, a rise of 90% on the same period last year. 2008 is a hard year for every industry owing to economic downturn, hence, the total fixed assets investment amount reduced to 70 % as compared with the same period 2007.

  According to some relevant data, investment ratio in Guangxi and Yuannan reached to 183.98%, 168.94% respectively in the first quarter of 2008, the ratio of Anhui and Heinan are 97.25% and 76.70 % respectively. Base on the data, we can see that the trend of transfer appeared.

What Is The Difficulty In Transfer Process?

Lack of mature industry chain:

  Some enterprises need to purchase raw materials from Guangdong and Fujian provinces, and some other enterprises should transport their equipments to new plants. It made the transport cost higher. In the eastern part, textile and closing enterprises do not need to pay much attention on following production. They only need to consider how to build good brand reputation and create brand competitive ability. However, after they transferred to mid-west part, they should focus on every procedure like design and sale.

High training cost:

  The labor cost in the mid-western area is lower than in the eastern regions; however, the skilled labor is short. Enterprises should train their labors and employees from basis. Take

Younger Co., Ltd. for example, it invested 0.1 billion Yuan in Chongqin Tea Garden industrial zone. It was expected that daily output should reach to 15000 clothes, and in the 2011, the number should up to 24000. However, its training cost reached to 1 million Yuan, in spite of high cost in training program, the company has to keep it on to set more skilled workers out in the program, for lacking of skilled employees is the big problem faced by these enterprises.

  Compared with eastern part, mid-western provinces have their disadvantage of investment climate. The market of Mid-west is also not mature, which made eastern enterprises feel uncomfortable to transfer there. .

The Transfer Trend Is Inevitable.

  2008 is a rough year for the whole world¡¯s economy. However, the investment in China¡¯s mid-western part is increasing.

  At the beginning of 2009, the domestic fixed asset of investment is 17.745 billion Yuan, decreased by 9.78% as compared with the same period last year. The amount in east was 11.29 billion Yuan, decrease by 24.58 % as compared with the same period last year, however, the investment amount in Middle part was 5.074 billion Yuan, increased by 42.26% as compared with the same period last year. And the amount in west was 1.381 billion Yuan, increased by 22.01% as compared with the same period last year.

  We can find that an upward tendency of investment in mid-western part appeared.

  Some measures were planed by government in order to make the market more and more mature. Some governments pay the training bill for enterprises. For instance, Nanshan municipal government trains rural migrant workers free in order to resolve the shortage of skilled employees.

Source form China Textile Magazine

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