Ministry of Commerce Support Textile Industry, and 100 Billion Property will be Transferred
Source: cncotton.com Date: 2006-11-03
According to China business newspaper, after nearly 10 months’ deliberation and bidding, some enterprises taking part in the first bidding of foreign trade and economic cooperation zones gradually got through the examination set by Ministry of Commerce from middle and late September. Ministry of Commerce was going to encourage Chinese enterprises to set up 10 foreign trade and economic cooperation zones this year, and 50 altogether in the future. The government would hand down nearly 100 billion Yuan to provide maximum financial support to enterprises.
Concerning the establishment of foreign trade and economic cooperation zone, Ministry of Commerce mainly aimed first at Southeast Asia, Africa, Central Asia and some developing countries who were complementary in economy with China. Although enterprises began to pass the qualification examination since middle and late September, in fact they had already started projects in advance of the government, including economic and trade cooperation projects between Russia, Mongolia, Cambodia and many other foreign economics.
However, some experts showed that it was not easy to get into overseas market with the support of the government. ”It is beneficial and necessary to realize the transfer of excess productivity and avoid the trade barriers, however, enterprises should not take a risk to go outside unless they have already had a full understanding of their own needs, qualifications and overseas markets.” said by Li Haolin, a scholar in college of Economy of Sichuan University, researching on international trade.
It was once pointed out in a report made by the World Bank that one-third of the china’s foreign investment suffered a loss. During the research on sample enterprises in a developed eastern city, they found that enterprises there which suffered a loss in foreign investment took up 54.7%, with only 10% succeeded. In previous years, in order to avoid trade friction, many domestic textile and garment enterprises chose to engage in overseas production. However, a survey on the operating conditions of Chinese textile and garment enterprises in Cambodia indicated that Cambodia absorbed the most intensive foreign investment of China’s textile and garment enterprises in the world. In the past decade, the number of Chinese textile and garment enterprises invested in Cambodia reached up to 107, but the situation was not very sound. Less than 20% of them could survived a profit, the rest suffered serious losses or even bankruptcy.
Therefore, Cao Xinyu, vice chairman of China Chamber of Commerce for Import and Export of Textiles had suggested that a great majority of domestic textile enterprises were not suitable for large-scale investments overseas since they small and medium-sized. Although the government has exerted great supports, they must rely on their own strength to succeed in overseas operations.
