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Chinese Government Backs Production Shift to Southeast Asia

The Chinese government is advocating a shift in investment to move production overseas to lower cost countries in Southeast Asia.

The strategy, called ‘Going Out’ is being supported by the China National Textile and Apparel Council, with a specific focus on ASEAN countries.

The goal of the program is to help Chinese companies maintain influence across the whole spectrum of clothing manufacturing, as it loses the ability to domestically produce the lowest cost clothing and textile manufacturing.

Bangladesh and Cambodia have emerged as new textile centers in response to the shift. The new policy should accelerate it, as Chinese capital moves into these markets.

About 120 fabric and textile firms are operated by Chinese companies in ASEAN countries, according to documents released by the council.

In April, the ASEAN region surpassed the EU as China’s largest export market for garments and textiles. Chinese textile exports to ASEAN grew 40.6% from April 2012 to April 2013, and 139% for clothing exports from China to ASEAN.

The China Export-Import Bank, overseas affiliates of state-owned Chinese banks, and the NDRC will support Chinese companies seeking to invest overseas.