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The main driving force for attracting Chinese enterprises to invest in the United States is the legal policies, tax and trade policies.
- Sep 06, 2017 -

Lin Yunfeng introduced that, "there are two modes of overseas investment of China's textile and garment enterprises. One is investing in manufacturing base, namely, setting up local factories and then manufacturing the products. This mode is mainly located in Southeast Asia and South Asia. For example, Chinese enterprises have invested in 2.5 million spindles in Vietnam, and 70% of the garment factories in Cambodia are invested by China; the other is the value chain integration, i.e. extending worldwide reach by acquisition and merger of raw material resources at both ends of the supply chain, design and R&D resources, brand resources and marketing channels."


The main driving force for attracting Chinese enterprises to invest in the United States is the legal policies, tax and trade policies. Lin Yunfeng reckoned that, "investment of China's textile and garment industry in the United States is less but representative. For example, under the South Carolina investment preferential policies, Zhejiang Keer Textile Co., Ltd invested US$ 218 million in South Carolina and got more than 1,000 acres of land to establish a spinning mill; and Suzhou Tianyuan garment Co., Ltd, China's largest supplier of Adidas, invested US$ 20 million in Arkansas, building fully automated, intelligent garment factory.


However, Chinese enterprises should also be cautious in overseas investment. Lin Yunfeng explained that, "cultural issues and localization of the workforce are the main problems that need to be focused during the process of Chinese enterprises' investment." If an enterprise is going to invest in the United States or Europe, it needs to pay attention to cultural differences. Different ways of thinking may lead communication more time-consuming and may encounter problems and misunderstandings during the process of investment and M&A. Besides that, it also needs to consider the local situation to operate during the production process after the investment, otherwise it may lead to investment failure.