It is understood that taking the Vietnam market as an example, after the TPP agreement comes into effect, Vietnam’s exports to the United States will enjoy zero tariffs and the prices will be very competitive. Therefore, Vietnam’s export volume is expected to increase by approximately 32%. Vietnam’s largest export industry is apparel and footwear for the textile industry. After enjoying zero tariffs, it is expected that it will stimulate the textile industry’s exports, and at the same time, it will also promote foreign direct investment. For Quanzhou, which is also a production base for textile shoes and shoes, it will inevitably bring shocks.
According to Guo Lingna, general manager of Shishi City Fengna Garment Co., Ltd., “The Shishi textile and garment industry has, for example, experienced competition from Southeast Asia in recent years.†Many customers who have purchased fabrics at Shishi have opened garments in Southeast Asia. Manufacturers, these garment factories have taken away the market share of some Shishi garment exporters.
According to reports, from the current point of view, the textile and footwear industry in Vietnam, Malaysia, Thailand and other places are developing rapidly, but they are more likely to stay in some simple garment processing links, with high technological content such as surface accessories and high-end printing and dyeing. The link still depends on the Chinese market. For example, some garment companies in Thailand that produce T-shirts, underwear, etc., still need to send some more complicated printing and dyeing processes back to China's coastal processing, because the local level of technology is still not enough. "As a result, the TPP agreement will affect the export of some low-end products," said Guo Rongna.
However, the competitive advantages of Vietnam, Malaysia and other countries in recent years are strengthening. Whether it is equipment or technology, the pace of upgrading is fast. Chen Cangsong, secretary-general of the Fujian Province Textile & Apparel Export Base Chamber of Commerce, told reporters that due to the low cost of labor, enterprises have enough profits, and the pace of industrial upgrading in some countries in Southeast Asia is fast. From the recent visits to Southeast Asia by Quanzhou textile and garment companies, some local shoes The company’s production equipment is even more advanced than Quanzhou’s. “Although there is still a few years of transition from the official implementation of the TPP agreement, Quanzhou will rely on a sound textile and apparel industry chain and its first-mover advantage in design and process, and it will still be able to maintain a certain degree of competitiveness within a certain period of time. With increasing pressure, it is necessary to continuously improve product innovation capabilities and service capabilities to the high end of the manufacturing industry."
The “going global†pace of enterprises will accelerate the continuous upgrading of R&D, design and manufacturing processes, and the development of high-end manufacturing industries. At the same time, going out to participate in global competition is also important for companies to effectively avoid the trade and investment barriers created by the fragmented free trade agreements such as the TPP. channel. For example, if Vietnam successfully joins the TPP, Quanzhou brand companies can set up factories in Vietnam and then export products to break the TPP blockade. However, it should be noted that according to the TPP regulations, all processes and raw materials after the “start of yarn†textile product must be carried out within the TPP member countries in order to enjoy zero-tariff treatment.
It is understood that from June 14th to 23rd this year, economic and trade delegations composed of representatives of our city and Haitian, Qunsheng Group, Minfa Aluminum, Tianguang Fire and more than 30 Quanzhou enterprises went to Malaysia and Laos. Cambodia launched a 10-day economic and trade activity. During the inspection period, there were more than 10 joint projects, including fire engineering, new building materials, and cross-border e-commerce. The garments and machinery production base projects invested by the two companies, namely Shenzhen-Dali Dali Garment Knitting and China National Aircraft Southeast Machinery, have landed in Cambodia. The total investment is US$18 million.
In recent years, more than 30 textile and garment companies have gone from Quanzhou to Southeast Asia to invest and set up factories. Last year, the city’s exports of ASEAN’s textile fabrics and textile equipment reached US$451 million and US$176 million, a year-on-year increase of 33.1% and 21%, respectively. . These companies investing in Southeast Asia first were profitable both at home and abroad, attracting more companies to invest in Southeast Asia. Guo Rongna told reporters that in Thailand alone, there have been hundreds of Quanzhou companies that have visited this year.
Quanzhou City Bureau of Commerce official said that the TPP agreement may speed up Quanzhou enterprises to invest in Vietnam and Malaysia. In fact, this kind of capacity cooperation is to a certain extent the promotion of Quanzhou's industrial upgrading: First, the use of local labor resources to reduce labor costs; Second, the use of local policy advantages to reduce business costs, in particular, can enjoy zero tariffs on exports to the EU , exports to the United States low tariffs and other preferential policies; third is to promote the transformation and upgrading. The labor-intensive production base of the company has shifted to Southeast Asia, and its headquarters has remained in Quanzhou to increase investment in new product design, R&D, and marketing, accelerating the transformation and upgrading of enterprises. Quanzhou Fengyi Textile has established a garment production base in Cambodia, which has driven more than 40 million US dollars in exports, and the company has successfully transformed and upgraded.
Using the FTA Agreement to reduce the impact of TPP “China is the second largest economy in the world, and competition and cooperation with the United States in the international market cannot be avoided.†Persons from Quanzhou Commerce Bureau stated that the follow-up of the agreement will definitely open to Quanzhou. The type of economy has a certain negative impact. However, "For Quanzhou industry, the opportunities in the global market are large and there is no need to be discouraged."
“For example, compared to Germany, Britain, and France, the first echelon of Europe, Spain, Greece, and other countries are relatively backward economies, but they are stronger than Southeast Asian countries and regions. Local demand for Quanzhou’s traditional manufacturing industry is also in great need of Quanzhou. Supplementary resources such as production capacity.†The Municipal Bureau of Commerce stated that regardless of how the TPP agreement is specifically promoted, it is an opportunity for Quanzhou industry to firmly seize the “Belt and Road†strategy, scientifically transfer surplus production capacity, and accelerate the pace of innovation and upgrading.
"Actually, the current national "One Belt and One Road" strategy, the establishment of Shanghai, Guangdong, Tianjin, Fujian Free Trade Zone, and the Free Trade Area Agreement (FTA) with other countries are all aimed at strengthening the neighboring countries and regions. Cooperation, but also can meet the challenges posed by the TPP agreement.†Professor Chen Bo, deputy director of the Department of World Economics and Trade at Shanghai University of Finance and Economics, said in an interview with reporters in Quanzhou.
It is understood that in TPP member countries, Australia signed a free trade agreement with China in June this year. After the tax cut transition period, the goods between China and Australia are close to 100% zero-tariff. In this way, the negative trade effect of TPP on China and Australia was offset by the China-Australia FTA. At present, among the 12 TPP countries, the countries that have reached FTA with China include Australia, New Zealand, Chile, Peru, and Singapore. They account for almost half of the TPP countries. Although Brunei and Malaysia have not signed FTA with China directly, their ASEAN has already signed FTA with China. In addition, China-Japan-South Korea FTA and China-Canada FTA are also in negotiations.
“No matter how the external environment changes, the internal strength of the enterprise itself is always the most important. On the one hand, the enterprise must do a better job in products and services, and continuously enhance the company’s competitive advantages and market discourse rights; on the other hand, it can catch the free trade zone. The opportunities brought about by the agreement will continue to open up new markets,†said an industry source.
On October 5th, 12 countries including the United States, Japan, Canada, Mexico, and Australia reached a basic agreement on the Trans-Pacific Partnership Agreement (hereinafter referred to as TPP) in Atlanta, United States, and agreed to conduct free trade. If the TPP agreement is really implemented, does it mean that it further squeezes the "Made in China" price advantage? When local companies compete in the international market, what kind of changes will they encounter? how to respond? On the National Day holiday, the TPP agreement became a hot topic in the business community in Quanzhou.
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