Modernisation in the country’s largest man-made fabric (MMF) sector will take a hit with the union ministry of textiles reducing the central fund allocation under the Amended Technology Upgradation Fund (ATUFS) scheme for 2019-20. According to the list of proposed budget allocation in the textile sector issued by the ministry, the ATUFS allocation has been slashed from Rs 2,300 crore in 2018-19 to Rs 700 crore in 2019-20. Surat’s textile sector has been the largest beneficiary of the government subsidy with the annual investment in state-of-the-art machinery pegged at over Rs 3,000 crore. Industry sources said that the reduction of ATUFS allocation will hamper the modernisation process in the sector. At present, the powerloom weavers have been shifting towards imported machineries for fabric weaving including water jet, air jet and jacquard machines for increasing productivity and saving costs. In the proposed budget allocation, the textile ministry has decreased the overall budget of the textile sector from Rs 6,943 crore in 2018-19 to Rs 4,831 crore. Also, a special incentive has been given to the farmers for procuring cotton by Cotton Corporation under price support scheme worth Rs 2,000 crore in 2019-18, which was Rs 924 crore in 2018-19. For the powerloom sector, the ministry has allocated Rs 150 crore for 2019-20, which was Rs 100 crore in 2018-19. Chairman of the Federation of Indian Art Silk Weaving Industry (FIASWI), Bharat Gandhi said, “The allocation of Rs 700 crore under ATUFS for the entire country is a meagre amount. In order to boost the textile sector, government subsidy under ATUFS is needed. President of the Pandesara Weavers Association, Ashish Gujarati said, “Powerloom sector contributes about 65% of the total production of textiles in India. There are 28 lakh looms in the country and six lakh are installed in Surat. The powerloom allocation of Rs 160 crore will not help the industry in adopting newer technology.”
Source: Times of India
Mining, printing of books, film production and software development will not be eligible for the new lower corporate tax rate of 15%. Finance minister Nirmala Sitharaman in Lok Sabha on Monday introduced the Taxation Laws (Amendment) Bill, 2019 that seeks to replace the ordinance, issued on September 20, to slash corporate tax rate to 22% without incentives and 15% for new manufacturing entities. The bill empowers the government to notify activities that may not qualify as manufacturing to be eligible for 15% tax rate. Besides, conversion of marble slabs and bottling of gas will not be eligible as per the bill. It also puts safeguards such as disallowing reduced rate of 22% if the prescribed conditions have been violated and disallowing losses or unabsorbed depreciation due to a merger under the provision. Sitharaman introduced the bill just before the proceedings in the Lok Sabha were adjourned for the day following uproar from opposition over political developments in Maharashtra. Amid the din, the government also introduced the International Financial Services Centres (IFSCs) Authority Bill, 2019, that provides for creation of a unified financial regulator for IFSCs. Sitharaman had announced on September 20 the lowering of the base corporate tax rate to 22% from 30% for companies that do not seek exemptions, and reduced the rate for some new manufacturing companies to 15% from 25% The corporate tax cut followed other measures by the government to prop up slowing GDP growth that fell to six-year low of 5% in first quarter of this financial year. These changes were effected through an ordinance as Parliament was not in session then. As per the constitutional process, an ordinance promulgated has to be laid before both the houses of Parliament and shall cease to operate at the expiration of six weeks from reassembly of Parliament or if before expiration of the above period, resolutions disapproving the ordinance are passed by both the Houses, on the date on which resolutions are passed. Besides reduction in corporate tax rates for existing and new domestic companies, the ordinance provided for withdrawal of higher surcharge for non-corporates on certain capital market transactions and relief from tax on listed companies on buybacks which were publicly announced prior to the presentation of the budget for 2019-20 on July 5.
IFSC Bill
The International Financial Services Centres Authority Bill, 2019 provides for the establishment of the International Financial Services Centres Authority. The authority will consist of nine members, appointed by the central government. Its members will include four members to be nominated from the Reserve Bank of India, the Securities and Exchange Board of India, the Insurance Regulatory and Development Authority of India, and the Pension Fund Regulatory and Development Authority, besides the chairperson. It will regulate financial products, financial services and financial institutions in an IFSC which has been approved by any regulator.
Source: Economic Times
A meeting of exporters was organized by Textile Development Foundation (TDF) Solapur on 21st November 2019 under the aegis of Home Textile Exporters' Welfare Association (HEWA) regarding pendency of RoSCTL. Central and state governments allow rebate on taxes to the exporters to promote exports under the RoSCTL scheme which was declared in the month of March 2019. Under the scheme, a 6.05% rebate was allowed on garments and 8.2% on made-ups such as Solapur made towels and bedsheets. While exporting towels from Solapur the costs were calculated on the basis that exporters will get back the levies, but due to delay in the payment of levies to the exporters under the scheme they are incurring heavy losses. Addressing meeting participants through video-conferencing, the HEWA officer bearer Sh. Vikas Singh Chauhan informed that payment under the RoSCTL scheme is under consideration of the Prime Minister's office and he hopes that very soon it will be sorted out positively. The meeting was attended by TDF President Rajesh Gosaki, ex-president Siddheshwar Gaddam, HEWA Representative Lingraj Gudur, Maruti Kendule, Mayur Daragad, Rohit Rathi, Dattu Dubaru and 30 other exporters.
Source: Devdiscourse
India’s textiles ministry has entered into partnerships with 25 India Handloom Brand (IHB) retail stores in various cities as per IHB retail stores policy framework to sell IHB products and has engaged 23 e-commerce agencies for promoting e-marketing of handloom products, textiles minister Smriti Irani told the parliament lower house recently. The government has been implementing Handloom Marketing Assistance (HMA), a component of National Handloom Development Programme (NHDP), across India to provide a marketing platform to handloom weavers and agencies to sell products directly to consumers, she said. Under the scheme, financial assistance is provided to national level handloom organisations and nominated handloom agencies of the state governments to organise marketing expos and events, according to an official release.
Source: Fibre2Fashion
Twenty-one agencies from 18 state governments have agreed to partner with the Indian textiles ministry under the Samarth scheme for Capacity Building in Textiles Sector (SCBTS), textiles minister Smriti Irani told the parliament recently. The ministry has in principle approved allocation of over 3.5 lakh targets to the agencies nominated by states for training. Interactive meetings are taking place at regular intervals with stakeholders in the ministry on the scheme’s Implementation, an official press release quoted the minister as saying. The agencies include the Arunachal Pradesh Handloom & Handicrafts Society Ltd, the Indian Institute of Handloom Technology in Kerala’s Kannur, the Telangana State Textile Complex Cooperative Society, the Uttar Pradesh Industrial Cooperative Association Ltd, the Uttarakhand Skill Development Society in Dehradun, the Assam Skill Development Mission, the Madhya Pradesh Laghu Udyog Nigam, the Institute of Entrepreneurship Development in Odisha and the directorate of handloom, sericulture & handicraft in Jharkhand.
Source: Fibre2Fshion
Divya Textiles of Surat has set up the first unit at the upcoming Whitegold Spintex Integrated Textile Park, which is being established at Ibrahimpatnam in Rangareddy district of Telangana. The company has set up 24 rapier looms with electronic jacquard and produces 1,200 sarees daily. Jayesh Ranjan, Principal Secretary (Industries & IT), Telangana, and EV Narasimha Reddy, Vice-Chairman & Managing Director, Telangana State Industrial Investment Corporation, were present on the occasion. More than 60 textile entrepreneurs from Surat attended the event. In his address, Ranjan promised full support to the investors in approval of incentives and urged them to submit proposals for customized incentives. Whitegold Spintex Integrated Textile Park is being set up on 130 acres of land at Ibrahimpatnam and will provide developed plots to weaving, knitting and garment units.
Source: The Hindu BusinessLine
FY2019-20 will go down as ‘annus horribilis’ in India’s economic trajectory. The drop in growth was so swift and so large that it can only be described as a crisis. India is now officially growing at a rate below 5%. At this ‘Hindu rate of growth’, India will not even reach $5 trillion by 2030. GoI is under immense pressure to boost demand by breaching the fiscal deficit. It is, in any case, going to be difficult to meet the fiscal deficit target, despite the huge windfall transfer of excess reserves of Rs 1.76 lakh crore from RBI. The revenue projections in the Budget are based on very unrealistic nominal GDP projections of 12% growth — 4% GDP deflator and 8% real GDP growth. More important is to reorient government expenditures towards a more developmental growth-oriented outcome — lower the recurrent expenditures and increase capital expenditures. Lower borrowing costs and cuts in subsidies could provide some space for this improvement in the quality of expenditures. Recovery in investment is key to recovery of the economy. Gross fixed capital formation as a share of GDP peaked in 2007-08 at 36% — it has since declined to about 28.5% — with private investment peaking at around 27.5% of GDP in 2007-08, and now slumping to 21.5%. Credit to the private sector as a share of GDP also peaked in 2013, and has since fallen — a contrast with Vietnam and Bangladesh, where credit growth has continued to rise despite a slowdown in global trade, as these economies have maintained export growth. RBI has done its part to some extent. It has, over the last year, lowered the repo rate by 135 basis points to 5.15%. But only a third of this cut has translated into lower lending rates by commercial banks. Further cuts in RBI’s repo rate are unlikely, as consumer price index (CPI) inflation has now jumped to 4.6%, implying a real repo rate of 0.55%, lower than is warranted.
RBI’s Monetary Policy Committee (MPC) has reduced the repo rate by 135 basis points since last year. But it has had no effect on the weighted average lending rate (WALR). Over the last year, WALR has gone up by 1.9% points. In general, since the establishment of MPC in 2013-14, WALR has jumped from under 2% in real terms to around 7% for outstanding loans and 6% for new loans.
Bad Bank for the Good
Pressure to come clean on NPAs — no doubt badly needed — forced banks to increase their lending rates and hurt economic growth, via both the consumption and investment channels. The high real interest rates has also meant that the real exchange rate remains hugely appreciated — by around 15-20% over the last five years. Such a high real exchange rate has hurt India’s competitiveness. The cost of not setting up a bad bank and conducting bolder financial sector reforms has now come to bite the system. Trade wars have added to the global slowdown. Nevertheless, the US-China ‘trade war’ was seen as an opportunity for several countries. So far, the biggest winner is Vietnam and, to some extent, Bangladesh. India seems to have missed the bus due to lack of competitiveness. Vietnam’s exports to the US have jumped by about 30%. It has seen huge inward investment from Hong Kong-based companies. India’s decision to not join RCEP may also make it a less attractive destination for firms leaving China. India has moved up again on the World Bank’s ‘Ease of Doing Business’ rankings to 77th position. But it remains behind Vietnam, Indonesia, Thailand and Malaysia. India dropped 10 ranks to 68th on the broader World Economic Forum (WEF) Competitiveness Index, which incorporates the ‘Ease of Doing Business’ index, but includes other factors as well. This suggests India will need to conduct more aggressive reforms in enforcement of contract, registering property, paying taxes and resolving insolvency, as well as conduct labour and financial sector reforms. The following will be needed to accompany the corporate tax cuts to boost investment: *Set up a bad bank, and privatise some State banks. Insolvency and Bankruptcy Code (IBC) is a good reform, but too slow to deal with the systemic non-performing assets (NPA) problem. *Labour flexibility for firms up to 500 workers. *Liberalise agricultural markets and exports, and boost rural demand by shifting funds to PM-KISAN and MGNREGA by reducing electricity and fertiliser subsidy. *Announce a new strategic trade and industrial policy, and select 8-10 industries for priority support, as was the case earlier for auto and pharma. *A new tourism push, ‘Swagat India’, to match ‘Swachh Bharat’, to double arrivals in 10 years. *Direct tax reform to complement corporate tax cut and widen the base. *Aggressively consummate disinvestment, including Air India sale and Bharat Petroleum Corporation Ltd (BPCL), Shipping Corporation of India (SCI) and Cement Corporation of India. A Stitch in Time This will be finance minister Nirmala Sitharaman’s first real Budget — she had to ‘adopt’ the previous one and then take actions to repair its damage. It would be better to get out in front and announce a set of coherent, comprehensive, bold reforms. It would also be wise to stick to a glide path of fiscal consolidation to leave more financial savings for the likely recovery in private investment, which can be further encouraged by bolder reforms to accompany the corporate tax cut.
Source: Economic Times
Data shows that non-financial firms had a 14.9 per cent fall in net profits in September 2019 quarter compared to the previous June 2019 quarter’s fall by 0.3 per cent. As India’s slowdown saga continues to pinch, India Inc’s capital expenditure has been shrinking, its net profits slowing down and its debt pile growing. Data based on a survey of more than 3,000 listed firms by Centre for Monitoring Indian Economy (CMIE) shows that non-financial firms had a 14.9 per cent fall in net profits in September 2019 quarter compared to the previous June 2019 quarter’s fall by 0.3 per cent. In contrast, it had risen by 2.3 per cent rise in the December 2018 quarter. Similarly, total income of these firms contracted by 5.6 per cent compared to September 2019 quarter as compared to a healthy 17.4 per cent growth in December 2018 quarter. "Corporate incomes and profits are contracting and in many cases sinking into red, it simply shows that the slowdown in the informal sector has spread far deeper into the organised sector," said Prof. Biswajit Dhar, Jawaharlal Nehru University (JNU). However, other analysts said that the figures have to be studied in a more disaggregated form. “It will not be uniform, much of the weighing down would be on account of real laggard sectors like telecom and textiles,” pointed out Aridam Guha, economist and partner, Deloitte India. Interestingly, corporate expenditures have also fallen. It contracted by 5.9 per cent in the September 2019 quarter compared to a growth of 17.4 per cent in the December 2018 quarter, a sign that corporate have been cutting costs to remain profitable. However, far more worrying is capital expenditure on new projects has dropped to Rs 1.14 trillion in September 2019 quarter compared to Rs 3.09 trillion in the December 2018 quarter, which represents a virtual halving of expenditure on new projects. While spending on completed projects has dropped to Rs 0.71 trillion in the September 2019 quarter compared to Rs 1.36 trillion in December 2018 quarter. The data by CMIE seems to suggest a remarkable lack of appetite among corporate leaders for investing in tough times. "This is a sign of real worry as lower capex means less new future streams of revenues and less future employment generation," said Guha. At the same time borrowing by these firms went up by 6.7 per cent in September 2019 quarter, that added to the overall debt but was at a significantly slower rate than 12.6 per cent in the March 2019 quarter.
Source: Indian Express
Textiles Minister Smriti Zubin Irani has moved a Bill in the Parliament for adding two new Lok Sabha members into the existing National Jute Board. While tabling the Bill, the Minister on Friday said the speaker may direct, two members from amongst themselves to serve as members of the National Jute Board. "That in pursuance of clause (b) of sub-section (4) of section 3 of the National Jute Board Act, 2008, the members of this House do proceed to elect, in such manner as the Speaker may direct, two members from amongst themselves to serve as members of the National Jute Board, subject to the other provisions of the said Act and the rules made thereunder," she said. Adhir Ranjan Chowdhury, MP from Berhampore asked the speaker to increase the number from two to four since Bengal, Odisha and Assam are all under jute belt and let people from there represent.
Source: KNN India
Global Textile Raw Material Price 25-11-2019
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
960.90 |
USD/Ton |
1.58% |
11/25/2019 |
|
VSF |
1448.81 |
USD/Ton |
0.20% |
11/25/2019 |
|
ASF |
2179.60 |
USD/Ton |
0% |
11/25/2019 |
|
Polyester POY |
994.28 |
USD/Ton |
0.36% |
11/25/2019 |
|
Nylon FDY |
2116.40 |
USD/Ton |
-0.67% |
11/25/2019 |
|
40D Spandex |
4076.55 |
USD/Ton |
0% |
11/25/2019 |
|
Nylon POY |
2400.48 |
USD/Ton |
0% |
11/25/2019 |
|
Acrylic Top 3D |
5369.11 |
USD/Ton |
0% |
11/25/2019 |
|
Polyester FDY |
1221.54 |
USD/Ton |
0.58% |
11/25/2019 |
|
Nylon DTY |
2002.76 |
USD/Ton |
-1.05% |
11/25/2019 |
|
Viscose Long Filament |
2315.25 |
USD/Ton |
0% |
11/25/2019 |
|
Polyester DTY |
1093.71 |
USD/Ton |
0.65% |
11/25/2019 |
|
30S Spun Rayon Yarn |
2059.58 |
USD/Ton |
0% |
11/25/2019 |
|
32S Polyester Yarn |
1562.44 |
USD/Ton |
0% |
11/25/2019 |
|
45S T/C Yarn |
2400.48 |
USD/Ton |
0% |
11/25/2019 |
|
40S Rayon Yarn |
1747.09 |
USD/Ton |
0% |
11/25/2019 |
|
T/R Yarn 65/35 32S |
2286.84 |
USD/Ton |
0% |
11/25/2019 |
|
45S Polyester Yarn |
2315.25 |
USD/Ton |
0% |
11/25/2019 |
|
T/C Yarn 65/35 32S |
1917.54 |
USD/Ton |
0% |
11/25/2019 |
|
10S Denim Fabric |
1.26 |
USD/Meter |
0% |
11/25/2019 |
|
32S Twill Fabric |
0.69 |
USD/Meter |
0% |
11/25/2019 |
|
40S Combed Poplin |
0.96 |
USD/Meter |
0% |
11/25/2019 |
|
30S Rayon Fabric |
0.55 |
USD/Meter |
0% |
11/25/2019 |
|
45S T/C Fabric |
0.67 |
USD/Meter |
0% |
11/25/2019 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14204 USD dtd. 25/11/2019). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
A number of textile manufacturers are moving their operations abroad or at least considering overseas expansion as cost of doing business, stuck up refunds, and high interest rates make products of world’s key producer more expensive, industry officials said on Monday. Officials said, Reshma Tex Limited, a leading textile firm, is already in talks to set up a textile factory in Vietnam. “Senior officials of Reshma Tex held meetings with Pakistan’s Commercial Section in Vietnam and authorities concerned in the South Each Asian country to discuss modalities of developing a textile factory there,” an official at the state-run Trade Development Authority of Pakistan (TDAP) said. The official said textile industry is facing “a severe liquidity crunch and no one was considering any expansion plans, at least in Pakistan”. “A number of manufactures are evaluating relocation or expansion abroad.” Meeting the operating expenses has become a challenge for the entire textile sector because of the acute shortage of liquidity, while the export-oriented industrial units were shutting down. Contrary to the claims of the government to expeditiously process and make payments against refund claims, only sales tax refund claims have reached Rs350 billion, of which Rs100 billion were accumulated in the last four months since the government ended the sales tax zero-rated regime. Millers earlier this month asked the government to bring back zero-rated tax facility on textile sector as it has failed to fulfill a promise on release of sales tax refunds of exporters within 72 hours under a new system implemented four months ago. All Pakistan Textile Mills Association (Aptma) the government promised to release refunds to the exporters within 72 hours after 17 percent sales tax on raw materials import was restored following withdrawal of zero-rated facility. The government withdrew zero-rated facility for five export-oriented sectors in the budget for the current fiscal year. “Over 40 units have closed, as government contrary to their claims, failed to issue sales tax refunds, which only in the last four months piled up to Rs100 billion,” Pakistan Apparel Forum Chairman Jawed Bilwani said at a joint press conference of value-added textile exporters associations earlier this month. He said that the government had promised to release the stuck up sales tax refunds on November 20, 2019, but the money has not been received yet. “Many small scale companies had shut down while the rest had adopted a wait and see policy. No one wants to move out of Pakistan, but the circumstances have compelled the industrialists to move out.” It may be mentioned here that the country’s textile exports posted growth of 7.4 percent during the month of October 2019, with total textile exports at $1.215 billion, compared to $1.131 billion in the same month last year. Cumulatively, textile exports during the four months of the current fiscal year 2019/20 inched up by 4.0 percent to $4.587 billion compared to $4.406 billion in the same period last year.
Source: The News
South Korea and Indonesia on Monday wound up seven and a half years of negotiations on a free trade deal, with an agreement to remove tariffs on steel, autos and beer. South Korea's trade ministry said ministers from the two countries signed a joint announcement on the completion of the South Korea-Indonesia Comprehensive Economic Partnership Agreement at their bilateral summit. The two sides will officially sign the deal early next year after reviewing the agreement. Once the deal is signed, it will be subject to ratification by each country's parliament. If the South Korea-Indonesia CEPA goes into effect, 93% of Indonesia's market will be open to South Korea, up from current level of 80.1%.The meeting was part of the Republic of Korea-ASEAN Summit, which South Korea hosted in the port city of Busan. In the deal, Indonesia agreed to lift tariffs on South Korean steel, autos, auto parts, textiles and machine parts, while Seoul will exempt tariffs on bunker C oil, sugar and beer from Indonesia. "We evaluate that this will help our companies investing in Indonesia establish their bases in ASEAN by removing tariffs on steel, auto parts and petrochemical products," said the ministry in a statement. "We set up a framework for cooperation in which both governments and companies can strengthen their ties in many fields such as industrial development, energy, cultural content, infrastructure and health." Indonesia's minister of trade Agus Suparmanto added in a statement that this will also provide Indonesia with "wider access" to the South Korean market compared to what has been provided through ASEAN-Korea Free Trade Agreement. "The partnership between the two parties will be mutually beneficial," he said. The announcement comes as South Korea's largest automaker Hyundai Motor is expected to ink an investment deal with Indonesia to build a factory in the archipelago, which would partly be used to manufacture electric vehicles. The deal will be worth $1 billion, according to Indonesia's coordinating minister of maritime affairs Luhut Panjaitan. The deal is a boost for Indonesia, which is hoping to become an EV manufacturing hub; the country has one of the largest reserves of nickel, a key component in lithium batteries for the vehicles. Hyundai's Japanese rival Toyota Motor is also looking to invest around $2 billion over the next five years, including spending to launch production of EVs.
Hyundai declined to comment on the deal.
The two countries' bilateral trade stood at $18 billion in 2018, up 14% over the previous year. Indonesia exports raw materials like coal briquettes and petroleum to South Korea, and imports such things as machinery and processed metals. South Korea has also risen as a major investor in Indonesia. It was the eighth largest investor in the archipelago in the nine months ended September, with realized foreign direct investment reaching $638 million. In December last year, Korean-Japanese conglomerate Lotte Group has pledged to invest at least $3.5 billion in what is to be Indonesia's largest petrochemical plant. The Indonesian industry minister recently said the chemical company LG Chem has run a preliminary study to invest $2.3 billion in an integrated battery plant in Indonesia, according to Reuters.
Source: Nikkei Asian Review
Second phase of China-Pakistan Free Trade Agreement (CPFTA) will come into force later this week that is to eliminate tariffs on 313 most priority tariff lines of Pakistan's export. The agreement is in line with the treatment China has given earlier to ASEAN's countries. These 313 tariff lines cover over US $8.7 billion worth of Pakistan's worldwide exports and US $64 billion worth of Chinese global imports. This will help to lessen Pakistan's trade deficit and give support to its economy, reports China Economic Net. As was decided by the two sides, the date of the agreement's implementation is December 1, 2019. Under the agreement, $19 billion of Pakistan's exports will be covered, which corresponds to $1.6 trillion of the Chinese global imports. The major products on which tariff have been eliminated are textiles, garments, seafood, meat, other animal products, prepared food, leather, chemicals, plastics, oilseeds, footwear as well as engineering goods including tractors, auto parts, and home appliance machinery. Increase in the sensitive list from 10% to 25% which comes to 1760 tariff lines and covers 37% of Pakistan's imports from China. This will give a fair amount of production to Pakistan's domestic industry from import from China. The major protected industry includes textiles and clothing, iron and steel, auto, electrical equipment, agriculture, chemicals, plastics, rubber, paper and paper board, ceramics, glass and glassware, surgical instruments, footwear, leather, wood, articles of the stones and plastics and miscellaneous goods. Talking to China Economic Net on telephone, Badar uz Zaman, commercial counsellor of Pakistan embassy in Beijing, said that the implementation of 2nd phase of CPFTA will increase further one billion US $Pakistan's exports to China. He mentioned this will help Pakistan's trade deficit and provide support to its economy. Under the new agreement, effective and robust measures have been taken to protect domestic industry from a surge in imports from China. Revision of safeguard remedial measures will provide protection of maximum 23 years against an import surge that may cause injury or threaten to cause injury to the local industry, said another official on condition of anonymity. In order to avoid under-invoicing of import from China, a system of electronic data exchange has been introduced in the trade taking place under the framework of the Free Trade Agreement (FTA). It's worth mentioning that the Phase-1 of FTA between the two neighbouring countries was signed on November 24, 2006 and became operational in 2007, while negotiations for the second phase of the CPFTA were started in 2011. After eleven rounds of negotiations, both sides concluded the agreement on April 2019 in Beijing. Under the second phase of CPFTA, Pakistan has secured enhanced and deeper concession on products of its exports interest revision of safeguards mechanism for the protection of the domestic industry, the inclusion of the balance of payment clause as a safety valve against the balance of payment difficulties and effective enforcement of the electronic data exchange. Moreover, the Chinese side also has agreed to accommodate Pakistan's request for immediate market access on its priority products, tariff reduction modality based on the principles of “less-than-reciprocity" longer phased out period for tariff reduction and effective safeguard measures for protection of the domestic industry.
Source: Business Recorder
Firms from South and East China open businesses in the region, eyeing huge labor force and geographic advantage. Zhao Honggen, manager of a sock-manufacturing plant in Shaoxing, East China's Zhejiang Province, decided in 2016 to open a production line in Kuqa County in Northwest China's Xinjiang Uyghur Autonomous Region. Though the prospect was exciting, he was nervous. "The local officials in Zhejiang talked with me then, encouraging me to take the lead as a Party member by setting up factories in southern Xinjiang's Aksu Prefecture and help provide jobs there," Zhao recalled. Zhejiang is the province tasked with assisting Aksu Prefecture under a central government program. During the talk, Zhao was impressed by the inexpensive local labor forces as well as the Xinjiang government's determination to invite business to the region. However, he was still worried by questions concerning the extent to which the promised favorable policies would translate into actions, and how quickly local labor forces would become highly skilled. Now, three years after opening shop, Zhao's concerns have been dispelled. His company, Hongyang Textile Co, is located at an industrial park for micro and small-businesses in Kuqa County under the administration of Aksu Prefecture. It has seen export orders climb by more than $100,000 this year despite impact from the China-US trade war. His export destinations have shifted from the US to Panama and Central Asian countries, taking advantage of Xinjiang's geographic position as a core area of the Silk Road Economic Belt and as a bridge to Central Asia. The company now has 164 employees, 158 of whom are Uyghur. The Global Times learned that their average monthly income is about 2,000 yuan ($284), with some experienced workers able to make 4,000 yuan a month. Last year, the manufacturer helped lift some 30 households out of poverty. Hongyang Textile is just one example of how companies in East and South China have migrated parts of their businesses to southern Xinjiang in recent years. In the first nine months of 2019, Aksu Prefecture welcomed 523 business projects from outside Xinjiang, up 24.23 percent year-on-year, bringing an investment of 45.82 billion yuan, according to data provided by the local government. The region has planned 580 local projects to attract outside investment. Some businesspeople are attracted by the local government's subsidies and policies, while others, like Zhao, are lured by relatively affordable labor forces and the region's geographic location which allows for diverse export markets. But those entrepreneurs do not come empty-handed. They teach new skills, raise local incomes and unite different ethnic groups in southern Xinjiang, where the Uyghur ethnic group accounts for about 80 percent of the population. Most importantly, the presence of their businesses brings wealth and stability to southern Xinjiang, a region once plagued by terrorism and extremism.
Relocating to Xinjiang
Walking around the Guizi business park where Zhao's factory is located, slogans advocating ethnic unity can be seen painted on many walls. One banner hanging outside the factory reads, "People of all ethnic groups should unite like pomegranate seeds," comparing the importance of ethnic unity to agricultural production. Zhang Wenjun, an official of the Kuqa Economic and Technological Development Zone which oversees the Guizi business park, told the Global Times on Friday that such an industrial park for small and micro-businesses is unique in southern Xinjiang. "It is an important means for local governments to solve employment issues," he noted. Shohrat Zakir, chairman of the Xinjiang regional government, vowed at the region's annual two sessions in January that maintaining social stability will continue to be an important task in 2019, Xinjiang Daily reported. Patigu Yusufu, a 55-year-old Uyghur worker, told the Global Times that she is more than happy to work at the industrial park. Yusufu, now a Party member, did not have any income before local officials found her a job at the factory in 2017. Now, she can package more than 4,000 pairs of socks each day, which brings her a monthly income of around $420 - higher than her husband's. By working together, Han and Uyghur employees form deep connections, according to Yusufu. "We're like a family, we care for each other a lot," she said. Some industrial parks are created to receive and accommodate companies moving from the south, according to officials. As such, most industrial parks provide free factories and dormitory housing for firms coming from outside Xinjiang. Additionally, they also offer discounts for electricity fees and social insurance payments. "We want to tap into Xinjiang's advantage to attract as many as companies as we can. Xinjiang may lack something but it does not lack land, so the local government provides all kinds of fixed-asset investment. What enterprises need to do is to come with equipment and technology," Zhang said. Take Zhao's company as an example. Hongyang Textile has been using a 5,000-square-meter factory free of charge for three years, and the only investment Zhao made to start up the business was 15 million yuan, which was used to source 253 pieces of sock-manufacturing equipment. The local government also purses 60 percent of the company's social insurance payment every year, according to Zhao. "It is very easy to set up a business in southern Xinjiang. The business environment is very friendly and local officials are very responsive," Zhao said. Labor costs are also significantly lower in Xinjiang. Tian Yong, a senior executive of chemical firm Yuxiang Huyang Co, told the Global Times that it only costs about 2,000 yuan to hire a worker in Aksu, while in Southwest China's Sichuan Province, labor fees and social insurance could add up to at least 6,000 yuan to hire a worker. The Sichuan-based company, which produces chemical products such as melamine and urea, opened a new factory in Xayar County under the administration of Aksu Prefecture in September 2009. Now, its industrial output accounts for 70 percent of Xayar's total, with sales hitting a record high of 1.2 billion yuan in 2018. "We're in talks with downstream companies in East China's Fujian Province and South China's Guangdong Province to bring more industrial chains, such as high-grade melamine tableware manufacturing, into southern Xinjiang," Tian said. Projects will begin in the first half of 2020. Yuxiang Huyang now employs 1,500 workers, 500 of whom are Uyghur earning 40,000 yuan a year. The establishment of the plant has contributed significantly to the local drive to reduce poverty.
Educating locals
Almost all local companies in southern Xinjiang, including Yuxiang Huyang and Hongyang Textile, organize weekly classes for Uyghurs, covering the Chinese language and tech education. But some executives are disappointed at the progress of the tutoring, which they said "has been moving very slowly among the minority workers." This in turn drags down production efficiency and weighs on profitability. "It's harder than we expected to nurture local skilled labor in southern Xinjiang, and we still have to rely on technical experts from Sichuan after a decade of localization," Tian complained. "This really is a Long March." The chemical producer has had to lower its employment standards repeatedly. Now, any Uyghur candidate who can write an article in the Chinese language will be admitted to the company. Yuxiang Huyang then provides training courses to qualify employees to undertake relevant work at the factory. Xinjiang Jinliyuan Clothing Co, a Shandong-based textiles manufacturer that established a new factory in Aksu in 2016, has been hosting tri-weekly classes for minority employees for the last three years. But now, with the same employment levels, the capacity of the Xinjiang factory is only about 40 percent that of the plant in Shandong. "At first, we thought it would be 70 percent after three years of training. This is far lower than our expectations," Zhang Jie, general manager of Jinliyuan, told the Global Times. He noted that the efficiency issue has made it difficult for Jinliyuan to make a profit. Last year, the textiles manufacturer incurred a loss of more than 9 million yuan.
Despite such difficulties, some expressed that things are getting better.
Zhao said that through their ongoing education courses, some Uyghur workers have formed the idea, "Work hard to live a better life," and the factory has seen a significant drop in employment mobility this year. "The process of forming a local skilled labor force is underway, despite being slow. In the future, the Xinjiang factory will also be able to produce high value-added sock products to increase profit margins," Zhang said. He also plans to export such products to snap markets in Russia and other countries along the Belt and Road Initiative, via the China-Europe freight train. In September, Aksu Railway Station was approved for a direct link to the China-Europe freight train route under a model of consolidated loading and shipping in southern Xinjiang. The trains, which depart from Urumqi Western Station with the aid of government subsidies, operate twice a week. The linkage to the route allows Xinjiang exporters to reduce the shipping time to Europe by roughly 10 to 20 days. Despite the outbound logistics convenience, some entrepreneurs also long for transportation subsidies when shipping materials into southern Xinjiang, as the region lacks a complete industrial chain. Despite Aksu's status as China's largest cotton production base, Zhao pointed out that all raw materials, parts and equipment used in the process of making socks are purchased from Zhejiang, which is about 4,700 kilometers from Aksu. "We cannot find such materials in Xinjiang - even dyeing needs to be completed in Zhejiang. Transportation costs have eaten up our profit," Zhang explained, urging the local government to step in and devise more measures to help create an industrial chain for the textiles industry.
Source: Global Times
According to the U.S. Environmental Protection Agency, more than 65 percent of all types of textiles generated in 2015 ended up in landfills, meaning they were unable to be composted or recycled among humans. Think of it like this — if your room were the Earth, your entire floor would be piled with trash that just cannot be vacuumed, mopped or thrown away. In an effort to fix this problem from the ground up, university researchers and textile companies are tapping into unconventional sources — from marine debris to food waste — to develop sustainable fiber materials and processes that won’t harm the Earth. “Fashion, to most people, is an ephemeral expression of culture, art and technology manifesting itself in form,” said Young-A Lee, an associate professor in Auburn University’s College of Human Sciences and lead researcher of a team that used green tea byproduct to develop biodegradable alternative to leather. “Fashion companies keep producing new materials and clothing, from season to season, year-to-year, to fulfill consumers’ desires and needs. This is really the time to think about where these items eventually go.”
Source: University Network
