With the approval of the State Council, the State Development and Reform Commission and the Ministry of Commerce recently issued the Catalogue of Advantages of Foreign Investment in the Central and Western Regions(Revised in 2017), which will take effect on March 20, 2017. The revision of the Catalogue is an important step to implement the strategic plan of the CPC Central Committee and the State Council to build a new open economy, and guide foreign capital to invest more in the central and western regions. The Catalogue will support the central and western regions to undertake the transfer of foreign capital and enhance the level of open economic development. The 2017 catalogue covers a total of 22 provinces(districts and cities) in the central and western regions, northeastern regions, and Hainan Province. Looking from the catalogue, this year the state will give important support to the introduction of foreign investment in the textile and clothing industry in the central and western regions. It also emphasized the importance of adding export-oriented textiles, clothing, furniture and other items in provinces with labor advantages to promote the formation of new export-oriented industrial clusters. Will this add more vitality to the development of textile and garment industry in the Midwest? What important changes will be brought about by the pattern of textile investment in the central and western regions?
Compared with the 2013 edition of the "List of Foreign Investment Advantages in the Central and Western Regions", the 2017 edition added 139 directories and reflected six important changes.
First, promote the transformation and upgrading of traditional industries. In provinces with advantages in agriculture(animal husbandry) industry, new items such as green food processing and the construction of standardized facilities and vegetable bases have been added to promote the transformation of agricultural production methods.
Second, we will support the development of new and advanced technology industries. In some provinces, six and six generations of TFT-LCD glass substrates, integrated circuit manufacturing, smart phones, tablets, and biomedicine have been added to support the development of electronics, medicine, and other industries.
Third, we will encourage the accelerated development of the service sector. According to local reality, some items of production service industry and domestic service industry have been added.
Fourth, we will promote the development of labor-intensive industries. In provinces with labor advantages, new items such as export-oriented textiles, clothing, and furniture have been added to promote the formation of new export-oriented industrial clusters. Fifth, we will strengthen infrastructure and industrial support. In some provinces, new items such as urban public parking facilities, car charging facilities, and construction of road freight station facilities have been added to promote the development of transportation and logistics networks.
Sixth, adjust the original items to the new situation. Some items have been adjusted and improved to better reflect the actual situation of local investment promotion. The person in charge of the National Development and Reform Commission(NDRC) 1 said that the establishment of export-oriented textiles, clothing, furniture and other items in provinces with labor advantages has promoted the formation of new export-oriented industrial clusters. This policy is a national strategy. It is also a local demand.
Promoting the formation of a new export-oriented textile and garment industry cluster will help the central and western regions to actively undertake the transfer of labor-intensive foreign investment industries in the eastern regions and the world. 2 As an important industrial policy for attracting foreign investment in China, the "Catalogue" clearly defines the three major preferential policies that foreign investment projects can enjoy. First, the import of self-used equipment within the total investment shall be exempted from tariff; The second is to give priority to the supply of land for projects with intensive land, and when determining the base price of land transfer, it can be implemented according to 70 % of the "National Minimum Standard for the Transfer of Industrial Land" corresponding to the location, etc.. Third, enterprises with foreign investment in the western region that meet the requirements can enjoy preferential enterprise income tax policies. 3 From the view of the increased textile and clothing industry projects, there are two major characteristics. First, many provinces(cities and districts) in the central and western regions with abundant labor resources still use high-grade cotton, wool, hemp, silk and chemical fiber textile, knitting and garment processing projects as important industries, hoping to have foreign investment. For example, Anhui Province, Jiangxi Province, Hubei Province and so on. Second, the province(city, district) that has the characteristics of the textile and clothing industry combines local realities and develops special projects. For example, the development of high-tech products for wool textiles and knitted fabrics and the production of carbon fiber products and their applications; The production and development of carbon fiber raw wire, carbon fiber production and auxiliary materials for production, carbon fiber composite materials and their products, and new materials for basalt fiber; Production of non-woven cloth and medical textiles in Hubei province.