China’s Xinjiang Uygur Autonomous Region has set up a $3.2 billion dollar fund to support its textile and clothing industry, with the goal of increasing employment, incomes and maintaining social stability in the sector.
According to Shanghai Daily, China’s central government will contribute part of the fund and Xinjiang will raise the rest. Under a 10-year textile development plan, 420,000 new jobs will be created, yielding an industrial output of roughly 86 billion yuan ($13.8 billion) by 2018, and 1 million jobs and 212.5 billion yuan ($34.2 billion) of output by 2023.
In addition to funding the textile industrial parks and clothing factories, Xinjiang will subsidize local cotton and electricity in qualified industrial parks. The region will also adopt strict environmental protection standards and control energy consumption during the process.
The fund will focus on the southern areas of Xinjiang, with clothing and tapestry factories there afforded free or low rents for a designated period, and language and vocational training centers will be opened, Yan Qin, deputy secretary-general of the Xinjiang regional government, said speaking at a press conference in Beijing.
Xianjiang now produces roughly 60 percent of China’s raw cotton and, according to Shanghai Daily, the lack of factories has meant low local demand. That coupled with poor access to the rest of the country, has caused Xinjiang’s cotton farmers to suffer in recent years.
China’s cotton policy and excessive reserves has driven domestic cotton prices to a higher level than imported cotton. Since April, when China announced it would lower the starting auction price of cotton and relaxed regulations governing the sale of reserves, demand has been declining despite the lower prices, adding to the country’s growing stockpile of cotton.
Gao Yong, vice president of China National Textile and Apparel Council, said, with the new fund, he feels more textile companies will open production lines in Xinjiang and use more local cotton to reduce costs, according to Shanghai Daily.