BIZCHINA / Light Industry
Foreign Investment
Updated: 2006-04-21 14:16
Introduction to Foreign Investment in the Textile Industry
Since the reform and opening-up, attracting foreign investment has played
a key role in China's economic development and reform and
foreign-invested enterprises have become an important component to
China's economy. In 2001, the contractual value of foreign direct
investment totaled US$69.19 billion -- an increase of 10.4 percent over
the previous year. The actual foreign direct investment was US$46.85
billion, up 14.9 percent.
The phases of foreign investment in the textile industry are basically
consistent with those of the national foreign investment. The 1979-1991
period was the initial development phase; 1992-1995 was the rapid
development phase; 1996-present is the adjustment and upgrading phase.
In the first phase, foreign investment mainly went to small projects and
small enterprises in the textile industry and the number of contracted
foreign-investment projects showed a progressive increase. During the
second phase, the central committee decided to accelerate reform and
foreign investment in the textile industry saw a booming development. The
number of foreign investment grew dramatically and more and more solely
owned, foreign-invested projects emerged. During the third phase, foreign
investment in the textile industry stepped into an era of adjustments and
upgrades, with the amount of foreign investment experienced a decline.
Foreign investment in the textile industry played an important role in
the national foreign-investment area. The contracted number of
foreign-invested projects in the textiles industry accounted for 10
percent of the total foreign-invested projects and the amount of foreign
investment in the textile industry accounted for 5 percent of the total
amount of foreign investment between 1983-2001.
In 2000, the number of the foreign direct-investment projects in the
textile industry was 801; contracted foreign-direct investment reached
US$1.99 billion and the amount of actual foreign direct investment was
US$1.37billion. By 2000, the number of enterprises with foreign
investment was 5,336, with a total output value of 264.27 billion yuan;
industrial value added was 66.91 billion yuan with 255.36 billion yuan in
total assets; ownership rights were at 113.43 billion yuan; sales income,
248.76 billion yuan; total profits, 10.64 billion yuan and the payable
value-added tax was 6.61 billion yuan.
Foreign investment in the textile industry has been developed steadily
and has now stepped into a phase of adjustment and upgrading. The main
method of utilizing foreign investment is via joint investments. In
recent years, the number of solely owned, foreign-invested enterprises
has been on the rise. Sources of foreign investments, like Hong Kong,
Taiwan, Japan, the United States, Macao and Korea, have been diversified.
The scale of foreign-invested enterprises has shown a momentum of
expansion. Large projects and enterprises have increased remarkably and
sizeable MNCs have begun investing in the textile industry on a large
scale. Foreign, solely owned enterprises in the chemical fiber area are
mainly large projects and the general technological level of
foreign-invested enterprises in the textile industry is quite high. The
industry structure of foreign-invested enterprises consists mostly of
textile- and garment-making enterprises; chemical fiber enterprises are
also an important component.
Most foreign investment concentrated in Eastern coastal regions is now
starting to shift to the Mid-Western regions. While the exports revenue
of foreign-invested textile enterprises has shown a momentum of rapid
increase. The economic efficiency of the foreign-invested textile
industry, however, is not so promising.
[Source: China Textile Industry Council]
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