Notice of the People’s Government of Henan Province on Printing and Distributing the Henan Province Textile Industry Adjustment Revitalization Plan

Yu Zheng [2009] No.75

All people’s governments of provincially-administered cities and key counties in Henan Province and all departments under the People's Government of Henan Province:

The Henan Province Textile Industry Adjustment Revitalization Plan (hereinafter referred to as “Plan”) is hereby printed and distributed to you. Please implement this Plan strictly.

The textile industry has an important role of promoting consumption structure upgrading, increasing employment, and expanding product export, and is one of the strategic pillar industries in Henan Province (hereinafter referred to as this “Province”) for the construction of the modern industry system and the rise of Central Plains. Formulating and implementing this Plan is of significant meaning for this Province to carry out the Circular of the State Council on Printing and Distributing the Textile Industry Adjustment and Revitalization Plan (Guo Fa [2009] No.10), make good use of its comparative advantages, accelerate accepting transferred industries, and promote textile industry structure upgrading, to turn this Province into a strong textile province with national significance and a big textile industry base with international competitiveness.

All provincially-administered cities shall take concrete measures to carry out this Plan and earnestly organize the implementation work according to the basic ideas, goals, tasks and policy measures set out in this Plan. Relevant departments under the provincial government shall, through enhanced communication, consultation and close cooperation with each other, formulate and improve various supporting policy measures as soon as possible, and take concrete actions to strengthen guidance and support with respect to the implementation of this Plan according to the specific division of work and working requirements of this Plan. People’s Government of Henan Province September 5, 2009

Henan Province Textile Industry Adjustment Revitalization Plan

The textile industry is a traditional competitive industry and an important livelihood industry in Henan Province. Accelerating textile industry development is very important for purpose of creating prosperous urban and rural markets, increase farmer's income, boosting employment and expanding product export. This Plan is specifically formulated in order to accelerate textile industry structure upgrading in Henan Province and foster and enhance strategic pillar industries in light of the Circular of the State Council on Printing and Distributing the Textile Industry Adjustment and Revitalization Plan (Guo Fa [2009] No.10) and the facts of this Province. This Plan is the 2009-2012 industry adjustment and revitalization implementation plan to provide guidance regarding industry development before 2020.

I. Industry Status Quo and Situation

(I) Industry Status Quo

In recent years, the textile industry of this Province has developed fast by making use of its advantages. In 2008, realized industrial added value of enterprises above designed size was RMB 33.5 billion and their sales revenues reached RMB 118.8 billion, showing a growth of 4 folds respectively as compared with those in 2000, and ranking to sixth in China from ninth in 2003; completed asset investment was RMB 26.68 billion, showing an average annual growth of 44.8%, which was 17.2 percent higher than the national level; the output of yarn and chemical fiber ranked 3rd and 5th in China respectively, and with knitting yarn output accounting for 1/3 of total national output, this Province was the biggest knitting yarn production base; the proportion of industrial added value of garments reached 16.1%, 9 percent higher than in 2000; the annual sales revenues of the garment industry in Zhengzhou characterized by trousers were over RMB 10 billion, and those of the knitting industry in Anyang characterized by knitted underwear were over RMB 5 billion; a batch of characteristic parks including Xinye, Weishi, Xinmi, Fugou and Yucheng began to take shape.

The textile industry in Henan Province has also accumulated some structural contradictions in the course of fast development, mainly manifested in unbalanced industry chain development with the “big before small” characteristics; relatively backward new product development and branding and shortage of innovative talents; laggard industry supporting system development, which affects sustained development of the industry; and industrial clusters being in the burgeoning and initial stage and not concentrated.

(II) Development Trends

1. Development Trends of the International Textile Industry.

(1) The financial crisis and difficulty for a sustained growth trend of the textile industry. Affected by the international financial crisis, consumption demands in the United States and other developed countries have dropped, the textile and garment export trade is facing difficulty now, but its long-term growth trend will not change. Since the 1990s, the average annual growth rate of global textile fiber consumption has been over 3% and even reached 4.9% during the period 2000-2007, both of which are higher than the average global GDP growth rate. In the long-term perspective, with the global economy recovering over time and emerging industries becoming bigger and stronger, the global fiber consumption will still keep at around 4% average annual growth.

(2) Competition of the Textile Industry Will Be Focused on Technical Progress and Innovation. With the textile and garment manufacturing capacities being transferred to developing countries at an accelerated speed and the transformation and upgrading of the traditional textile industry speeding up, the effect of labor cost on the global market share of textiles and garments will decrease gradually; the new style textile industry driven by information technology and characterized by new materials, new equipment, new technologies and new products will become the main development direction; the competitive edge of this industry will be much reflected on the high-tech transformation of traditional industry and the development and application of renewable raw materials, clean production and cyclic utilization technologies.

(3) International competition of the textile industry is increasingly fierce. Developed countries have an obvious edge in such fields as high-tech and high value-added textiles, branding and marketing channels, they are holding the top status and the initiative in the global vertical hierarchy, and they also implement trade protection by means of technical barriers, antidumping and special protection to maintain their industrial interests. Meanwhile, developing countries including India, Pakistan, Vietnam and Bangladesh are becoming a considerable competition pressure on Chinese textile export by virtue of their cost advantage.

(4) Chinese Textile Industry Still Maintains its International Competitiveness. Firstly, labor cost in China is still far lower than that in developed countries and gradient transfer of the textile industry at home will also effectively continue the cost advantage of Chinese textile industry; secondly, China has prominent advantages in terms of complete textile and garment industry chain and developed industrial supporting system, which cannot be substituted over overcome by developing countries such as India and Vietnam; thirdly, price advantage alone is not enough to change the choice of high-end demand of the value chain, and the Chinese textile industry has won stable market share and good reputation in the international market by virtue of its comprehensive merits regarding product variety, quality and quick response.

2. Development Trend of the Domestic Textile Industry.

(1) Domestic Fiber Consumption Demand Grow Fast and Persistently. In 2000-2008, the per capita fiber consumption in China increased from 7.5kg to 15.5kg, which is much less than 30-40kg, the fiber consumption level in developed countries, indicating a great growth potential. Consumption demands for traditional garments and home textiles grow continuously and per capita clothing consumption will continue keeping a growth over 13%. Textiles for industrial purpose pose a broad market prospect and demands for products such as geo-synthetic materials, medical and healthcare textiles, auto textiles and agricultural textiles will growth fast and persistently.

(2) Textile and Garment Consumptions Demands Increasingly Diversified and Layered. In a general view, consumer groups will be more and more demanding to products in terms of taste, comfort, functionality and environmental protection. Individualized and fashionable brand name products with cultural content will face growing demands in large and medium-sized cities, while affordable good- quality products with attractive designs will face growing demands in small- and medium-sized towns and the countryside. Diversification and gradation of demands provide a new market opportunity for enterprises with strong design and R&D capability and an edge with respect to brand and channel, and also create a growth space for enterprises with good product quality, strong cost control, and smooth specialized market channel.

(3) Upgrading and Transformation Trend of the Textile Industry Is Obvious. The Chinese textile industry has already entered into a strategic transition stage where technical, management and brand innovations are a very important channel for China to implement structure upgrading, go to the high end of the global value chain, and finally turn itself from a big player to a strong player in the textile industry. New style textile materials and industrial textiles and other high-tech textiles will be applied in increasingly more fields and producer services such as specialized logistics, marketing and public service platform will play an increasingly obvious role of supporting and driving the industry development.

(4) Industrial Transfer Is Speeding Up. In eastern coastal regions, to keep and increase competitiveness, importance is attached to high technical content and high value-added links, and low/medium-end production links are relocating to regions with good processing quality and low cost at a quicker speed. The central and western regions are a reasonable choice for purpose of rational division of labor in a greater geographical scope and optimal resource allocation, as their advantages can complement eastern regions’ advantages.

(III) Basic Judgment about Textile Industry Development in Henan Province

The textile industry in this Province is a “three haves and one opportunity” industry. First, the textile industry in this Province has a potential and is growing well. Products of the textile industry are consumer goods and necessities and the market is stable and poses a huge space, so the textile industry has a good growth. Fast growth of overseas and domestic consumer demands and industry demands, particularly the huge consumer market of textiles and garments posed by the huge population of this Province, will become persistent drivers for the fast development of the textile industry in this Province. Second, the textile industry in this Province has an edge. It has competitive advantages, which will remain for a period, both at home and abroad. Firstly, there is the industrial base. Henan has a cotton textile capacity of 15 million, ranking third in China, and a batch of backbone enterprises in this industry, with the knitted garment industry chain taking shape and with many characteristic industrial clusters already formed; secondly, Henan has a prominent cost advantage with respect to labor resource and other factors. Henan is a province with nearly 100 million people, so the labor supply and low labor cost advantage will exist in the long term, and this Province is rich in cotton resources and has fairly sufficient land and power supply, all of which indicates a cost competitive edge for textile development; thirdly, there is the regional advantage. Located at central China, Henan Province is a critical hub for China’s inland transport, which is a unique geographical advantage for radiation in the domestic market, central and western China, and also neighbors strong textile provinces in eastern China, providing favorable conditions for accommodating industrial gradient transfer and actively exploiting the international market. Therefore, its industrial competitiveness will increase greatly, as long as its problems are solved. Third, it is of overall importance. The textile industry has a long industry chain, which extends from raw materials such as cotton all the way to garment, and is highly relevant to other industries, e.g. closely related to chemical fiber products horizontally, and as a main channel for employment expansion, this industry is of overall importance to Henan Province with such a huge population. Fourth, at present, textile industry adjustment and upgrading and industrial transfer is speeding up, so this Province is faced with a god- given opportunity, for it has a good foundation for accommodating such transfer.

The textile industry in this Province mainly has four problems: firstly, the industry chain is short, cotton textile develops fast, but the printing and dyeing and garment industry develops slowly, and the industry system is incomplete and can't form an integrated advantage. Second, the processes, technologies and equipment are backward, resulting in low-grade products, which can’t meet the consumption upgrade requirements. Third, specialized markets are lacking, the network is imperfect, and specialized logistic system is yet to be developed. Fourth, this industry is short of brands and leading enterprises, resulting in weak brand effect and driving force.

In general, accelerating textile industry development is of overall importance for optimizing the industry structure, increasing employment and promoting consumption structure upgrading in this Province and also meets the industry selection requirements for high competitiveness, good growth and high relevance. The textile industry shall be fostered and developed as a strategic pillar industry in this Province, guidance and support shall be given to the textile industry, and try hard to make this Province into a powerful textile industry province and an important textile industry base in China and try even harder to make it get a foothold in the global textile industry.

II. Basic Ideas and Development Goals

(I) Strategic Positioning

The textile industry shall be positioned as a strategic pillar industry for constructing the modern industry system and fulfilling revitalization of the Central Plains, so that Henan Province will be built into an important textile industry base in China and a powerful textile industry province with international competitiveness.

(II) Basic Ideas

Deeply carry out the Scientific Outlook on Development, around the overall requirements of “utilize advantages, optimize structure, technology leads, bellwether drives, develop centrally, and expand employment”, with “constructing a competitive modern textile industry system” as the mainline, depending on the domestic market, actively exploit overseas markets, exert focused efforts in the development of end industries such as garment, home textile and industrial textile, modify and upgrade traditional industries such as cotton textile and chemical fiber, develop the printing and dyeing industry moderately at a high start point, promote the construction of industry concentration areas, accommodate industry transfer properly, boost chain style development of industry clusters, enhance technical innovation and branding, consummate industry service system, reinforce competitive backbone enterprises, develop characteristic small and medium-sized enterprises, and increase industry coordinating and supporting capabilities, thus to form an industry development pattern with a complete industry chain, a sound market system and a reasonable space layout.

(III) Main Principles

1. Highly Industry System Improvement. Specify the adjustment direction of products and industry structure, further extend and improve the industry chain, and promote the development of upstream and downstream industries, so that a complete chain comprising cotton planting, yarn spinning, weaving, printing and dyeing and garment will take shape, and a competitive modern industry system will come into being over time. 2. Highlight Industry Technical Progress. With the importance attached to both indigenous innovation and introduction and assimilation, vigorously promote equipment updating and technical transformation to improve the technological level and production efficiency of the textile industry. As regards product development, pay attention to high-end products and give consideration to medium and low-end products to get a combination of “high, medium and low-end products” that can meet multi-level consumption demands. 3. Highlight Industry Layout Optimization. Promote industry layout optimization through concentrated development persistently, guide the textile industry to be concentrated at producing areas of raw materials and areas with a good foundation, push qualified enterprises to develop in industrial agglomerations, and try hard to foster several big textile bases. 4. Highlight Brand Enterprises’ Driving Force. Pay attention to brand name products and also give consideration to ordinary products. With the importance attached to both OEM and independent branding, encourage creating proprietary brands, but not abandon OEM-based production for famous enterprises. Try hard to help backbone enterprises in this Province, but at the same time vigorously introduce famous and leading textile and garment enterprises from outside. 5. Highlight Service System Construction. Foster and hold high-level commodity garment trade fairs to form an influential textile and garment trade platform in China. Promote the development of textile and supporting industries to build a national textile and garment purchase platform and an efficient and advanced textile and garment logistics center. Exert greater efforts in training top-caliber talents, professionals and technicians and actively introduce management personnel and technicians to build the human resource advantage for textile industry development. 6. Highlight Industry Transfer Accommodation. While strengthening local industry fostering and supporting, create and seize good opportunities, take initiative to introduce high-end leading enterprises and branded enterprises from coastal regions and from abroad, and strengthen cooperation with logistics enterprises and distributors, thus to promote great development of the textile industry through massive investment promotion.

(IV) Development Goals

It is fully integrated into the domestic and global supply system, the industry structure is further optimized, indigenous innovation capability significantly increased, and product variety and quality obviously improved. By 2020, the modern textile industry system will take shape and Henan will become a technology and brand-oriented strong textile industry province.

1. Industry Scale. By 2012, sales revenues of the textile industry in this Province will be RMB 300 billion, including RMB 215 billion from enterprises above the designated size, growing by 16% annually on average. By 2015, sales revenues of the textile industry in this Province will be RMB 600 billion, including RMB 340 billion from enterprises above the designated size, growing by 15% annually on average. In 2020, sales revenues from enterprises above the designated size in this Province will double those in 2015.

2. Industry Structure. By 2012, the proportion of added value of the garment industry to the textile industry in this Province will be over 20%, the competitive power of cotton textile and chemical fiber industries will further increase, end textiles will quickly expand in size, weak links such as printing and dyeing will be reinforced, and a complete industry system will take shape. By 2015, the proportion of garment industry will be over 25% and home and industrial textiles will have got their own characteristics and advantages. By 2020, the proportion of the garment industry will be over 35%, the industry chain coordination capability will increase greatly, and a modern textile industry system will basically take shape.

3. Technical Progress. By 2012, the proportion of advanced technical equipment will be over 70%, the proportion of R&D investment to sales revenues will be over 1%, reaching the average national level; public innovation service platforms will be built in all key industry cluster areas, and output value rate of new products will increase to 7%. By 2015 and 2020, the proportion of R&D investment to sales revenues will be over 1.5% and 2% respectively.

4. Energy Conservation and Emission Reduction. The industry-wide comprehensive energy consumption per unit added value will decrease by 5% annually on average, water consumption decrease by 7% annually on average, and waste water emission decrease by over 7% annually on average.

III. Industry Development Positioning

With cotton textiles, chemical fiber, garment, printing and dyeing and knitting as the backbone industries, actively promote the development of industrial and home textile industries, and optimize and adjust key industries. Give a vigorous boost to equipment update and technical transformation, accelerate the application of information technologies suitable for industry characteristics and management requirements, and promote the integration of industrialization and informatization.

(I) Cotton Textile Industry. 1. Product Positioning. With the importance attached to pure cotton knitwear, develop high value-added products such as spun-dyed yarn; promote the development and application of new type fibers such as non-cotton natural fiber and differential fiber to produce high- quality yarn and fabric; and actively develop leisure wear’s shell fabric and other characteristic product types to support medium/high-grade garment and home textile products. 2. Technical Transformation and Upgrading. Encourage adopting new type, efficient and energy-saving equipment, accelerate technical transformation and upgrading, and uplift the proportion of reel-less, knot-less, shuttle-less and combed products, reaching the advanced level in China by the end of the “Twelfth Five Year” period; support qualified enterprises in their efforts to adopt continuous production equipment; encourage the replacement of PVA pulp by environmentally-friendly pulp; promote technical transformation including efficient smart air conditioning system, building energy conservation, motor converter, and new style lighting. Accelerate eliminating “1-prefixed” spinning and weaving and other outdated equipment.

(II) Chemical Fiber Industry. 1. Product Positioning. Sticking to the highlighted focus, further strengthen and increase the advantage in terms of nylon industry chain and viscose. Accelerate the localization of adiponitrile which is the raw material of nylon; strengthen the R&D of differential and functional fiber products such as Dacron, Chinlon, viscose and spandex and develop fibers for medical and healthcare purposes to increase the industrialization ratio of new fibers; encourage the R&D and industrialization of new type fiber technologies such as aramid fiber, solvent method cellulose fiber, ultra- high strengthen polyethylene fiber, and polylactic acid fiber, etc. 2. Technical Transformation and Upgrading. Promote the construction of supporting industries for the nylon industry, increase the single line production capacity of polymerization plants, and reduce consumption; improve the clean production and cyclic economy level of viscose and uplift viscose manufacturers’ waste water, solid waste and exhaust gas treatment, recycle and reuse levels.

(III) Garment Industry. 1. Product Positioning. Closely depending on the provincial and neighboring markets, based on domestic sale, further develop knitted garments with industry chain advantage such as underwear, children’s wear, sweater, sports and leisure wear, with attention paid to improving product quality and grade; vigorously develop trousers, shirts, western style clothes and jeans in series based on the existing industrial foundation. 2. Technical Transformation and Upgrading. Increase the use ratio of specialized machines, increase the use ratio of CAD (computer-aided design)/CAM (computer-aided manufacturing), suspended transmission system and other automatic equipment in garment enterprises, strengthen the development and application of garment industry engineering (IE), and optimize enterprise production process, thus to continuously improve enterprises' technical levels and quick response capability.

(IV) Printing & Dyeing Industry. 1. Product Positioning. Attach importance to the development of loose stock dyed and yarn-dyed products; actively generalize pigment-dyed, digital-printed and transfer- printed products; and pay attention to various ecological and environmental technical standards and regulations and exert greater efforts in the development of ecological textiles. 2. Technical Transformation and Upgrading. Generalize the application of efficient and low-consumption new processes such as paint printing, transfer printing, airflow dyeing, short-process pretreatment, bio-enzyme treatment, cold rolling, loose efficient drying, etc; generalize the application of electronic color match testing, automatic proportioning and feeding, and digital online monitoring; fully implement recovery of waste water, flue gas and used heat, reuse of recycled water, waste water deep-treatment technologies and other new type technical processes and equipment to reduce energy consumption; accelerate the elimination of outdated production processes and equipment with high energy and water consumption such as 74-type dyeing and finishing production line and hot-blast clip stenter; and prohibit the expansion and transfer of high-consumption obsolete equipment.

(V) Knitting Industry. 1. Product Positioning. With the importance attached to improving quality and increasing added value, accelerate developing toward combing, yarn dye, jacquard and mercerizing, and strengthen exploiting the market of leisure wear, outerwear and sportswear to improve product grade and enrich product structure. 2. Technical Transformation and Upgrading. Actively adopt advanced knitting equipment such as fine gauge circular knitting machine, multifunctional single-face circular knitting machine, terry knitting machine with various designs, computerized both-side jacquard, turntable printing machine, seamless underwear making machine and eliminate outdated knitted equipment such as old- fashioned interlock machine and rib knitting machine.

(VI) Industrial Textiles. 1. Product Positioning. Attach importance to the development of textiles for medical and healthcare purpose, airbag filament for automobiles, wide-width high-strength composite earthwork materials, special functional covering, high-strength multilayer papermaking net, etc.; in consideration of the construction of the million auto industry base in Zhengzhou, actively develop textiles for automobiles; and encourage developing environmentally-friendly filter materials and agricultural textile materials. 2. Technical Transformation and Upgrading. Adopt wide-width efficient spun-bond and melt-blow equipment and generalize the use of composite processes and equipment comprising the combination of spun-bond, melt-blow, spunlace and needling to increase the use ratio of after-finish equipment for industrial textiles.

(VII) Home Textile Industry. 1. Product Positioning. By making use of yarn, cellulose fiber and other relevant resources in the Province, develop various products including towels, bath towels, bed sheet and quilt cover, sofa towel, napkin, tablecloth, curtain, etc; actively develop characteristic silk home textile products such as mulberry silk and tussah silk; promote the development of unique artistic home textile products such as Kaifeng embroidery, coarse cloth, and handmade silk carpet based on the development of the tourist and cultural industry in Henan Province. 2. Technical Transformation and Upgrading. Generalize the use of wide-width new type shuttle-less loom, advanced electronic jacquard machine, and high-density terry cloth loom, adopt energy-efficient and low-emission printing, dyeing and after-finish production line, and generalize continuous and high-speed sewing equipment.

IV. Main Tasks

(I) Promote Industry Structure Adjustment and Improve Industry System

Uplift the industry chain’s overall competitiveness persistently through end product development, try hard to expand end products, enhance front-end products, break the dyeing and finishing bottleneck, and let supporting industries take shape, thus to boost industry structure upgrading.

———With equal importance attached to meeting domestic market and exploiting international market, and with strengthening industry competitiveness as the core, actively introduce competitive enterprises, try hard to enhance processing and manufacturing capability, uplift R&D and design, supply chain management and marketing level, and expand the market scale of garments, home textiles and industrial textiles quickly.

———On the basis of meeting the quick response and R&D and design needs of downstream garment industry, develop the printing and dyeing industry moderately at a high level by adopting advanced process technologies and equipment, with the importance attached to improving knitting and dyeing and finishing capabilities with less pollution, high yarn adaptability and high design requirement such as knitted children's wear, sweater, and leisure and sportswear.

———With the importance attached to reducing cost and improving differentiation level, guide cotton textile and chemical fiber enterprises to actively develop new products, enrich the product structure and improve product quality.

(II) Optimize Industrial Layout and Boost Cluster Development.

Gather factor resources, accelerate the 4 comprehensive industrial bases including Zhengzhou, Nanyang, Xinxiang and Zhoukou and 5 industrial cluster areas including Xuchang, Kaifeng, Anyang, Shangqiu, and Pingdingshan, and encourage other regions to actively characteristic textile industries base on their industrial foundations and resource conditions, thus to form an industry layout with reasonable division of work, distinctive features, and prominent advantages.

1. Comprehensive Industry Bases.

———Zhengzhou Textile Industry Base. Make full use of the concentrated human resource, developed market and strong radiating capacity of Zhengzhou, with attention paid on industrial cluster areas including Zhongyuan District, Erqi District, Xinmi, Xinzheng and Xingyang, vigorously develop garment’s proprietary brands and OEM processing, actively develop high-quality cotton textile and medium/high-grade industrial textiles, strengthen the driving and supporting force of specialized market and logistic system for the textile industry; encourage and support the development of the textile and garment design and creative industry and try hard to turn Zhengzhou into a fashion city in the Central Plains.

———Nanyang Textile Industry Base. With the importance attached to Zhenping Sweater, Xinye Cotton Textile, Dengzhou Garment, Nanzhao Silk and Home Textile and other industrial cluster areas, strengthen coordination and matching with the industry chain of dyeing and finishing enterprises in neighboring areas such as Xiangfan of Hubei Province, in order to form a textile industry base characterized in garment and home textile and dominated by cotton textile.

———Xinxiang Textile Industry Base. With the importance attached to Bailu Chemical Fiber and industrial cluster areas such as Huixian, Fengqiu, Weihui and Changhui, reinforce and increase the advantage in terms of viscose and industrial textiles and try hard to expand the scale of garments and home textiles to turn Xinxiang into an important chemical fiber and textile production base.

———Zhoukou Textile Industry Base. With the importance attached to industrial cluster areas such as Fugou, Shangshui, Xihua and Taikang, by making us of the advantage in terms resources such as cotton and labor, try hard to increase the proportion of high-count spinning, blending and colored cotton spinning, develop the printing and dyeing business, and expand the garment industry scale at a faster pace, thus to turn it into an important cotton textile and garment production base.

2. Specialized Industry Clusters.

———With the importance attached to Weishi and Qixian in Kaifeng and to Xiangcheng and Yanling in Xuchang, build cotton textile industry clusters dominated by high-quality knitting yarn.

———In Anyang, with the importance attached to the industrial cluster area and Huaxia, highlight supporting services for dyeing and finishing, optimize the industry layout, regulate the construction of specialized markets, and improve the knitting industry chain, thus to turn it into the biggest knitted garment industry cluster in mid/west China.

———In Shangqiu, with the importance attached to Xiayi, Suiyang, Yucheng and Liangyuan and other industrial cluster areas, by depending on these industrial cluster areas, actively introduce competitive enterprises to drive local industry upgrading, thus to turn it into an important knitted children’s wear industry cluster.

———In Pingdingshan, with the importance attached to the development of nylon industry chains such as nylon fiber, tyre fabric, air bag filament and decorative filament, and with Shenma Corporation as the leading enterprise, actively develop high-tech fibers and industrial fibers, lead industrial textile enterprises particularly auto textile producers to concentrated development, thus to turn it into an influential industrial textile cluster in China.

(III) Strengthen Branding and Try to Foster Leading Enterprises.

———With the importance attached to creating popular brands, implement the “Famous product and store” program, actively boost win-win cooperation between commerce and industry, and build and improve the sales network. Enhance branded enterprises’ product R&D, design and innovative capabilities, support enterprises in their efforts to strengthen proprietary brand publicity and channel building through exhibition platforms and cooperate with domestic and foreign famous brands to improve their brand management levels and market competitive capabilities; try hard to build 30 backbone enterprises with prominent advantages in terms of brand culture, design creativity, technical R&D and marketing network, and 5-8 influential garment and home textile proprietary brands in China.

———Actively Build Regional Brands Based on Industrial Clusters. Exert greater efforts in the publicity of regional brands by making use of multiple modes including media and exhibition; strengthen regional brand public resource management and maintain and improve regional brand image; strengthen cooperation with commercial distribution fields such as main wholesale and retail markets and supermarkets in China to expand market coverage of industrial cluster areas. Try hard to build 3-5 regional brands with distinctive characteristics.

———Vigorously introduce strategic investors and foster and develop leading enterprises in the industry. Around strengthening core competitiveness, strengthen cooperation with domestic and foreign competitive enterprises, particularly transnational companies owning famous end textile brands or controlling marketing networks, promote enterprise restructuring and industry integration in the Province, improve enterprise product chain, improve technical level, strengthen capital strength, and expand industry scale.

(IV) Vigorously Develop Producer Services to Further Improve the Service System.

———Strengthen Specialized Market Construction. Accelerate the development of exhibition services and actively foster and hold high-level commodity garment trade fairs to form an influential garment trade and exhibition platform in China. Create conditions to promote accelerated development of textile and supporting industries, expand specialized textile and garment market trade scale, and adopt new business modes such as e-commerce to uplift modern management levels, thus to build Zhengzhou into a national textile and garment purchase platform and efficient and advanced textile and garment logistics center; form regional and characteristic textile and garment wholesale and retail markets in Anyang, Nanyang, Kaifeng and Shangqiu; build a batch of specialized raw material and auxiliary material markets around the industrial cluster areas and get supply channels through; build the specialized markets into important drivers for regional textile industry development on the principle of high start point, strong functionality and good service.

———Vigorously Develop Production Services. Around getting the production and supply and sales links through, accelerate the construction of specialized third-party logistics systems adaptable to textile and garment characteristics, strengthen the information-based of warehousing and logistics construction centered at the unification of electronic two-dimensional textile and garment code, provide multi-batch, small-variety and short-term logistics services suitable for garment products, auxiliary materials and decorations, improve logistics efficiency, and reduce logistics cost; accelerate the construction of public service platforms with respect to design and R&D, quality testing, information, certification, electronic commerce, and training; establish an open innovation system in which enterprises, universities and research centers can cooperate with each other closely and play their respective role.

———Enhance the Human Resource Advantage. Make use of resource advantage of textile-related colleges and schools to strengthen school-enterprise cooperation, accelerate training top-caliber talents and professionals and technicians for the textile and garment industries; actively create conditions to introduce senior management, design and technical personnel from outside the Province to provide powerful human resource support for textile industry development in Henan Province.

(V) Strengthen Investment Promotion and Actively Accommodate Industry Transfer.

With the industrial cluster areas as the carrier, create new investment promotion modes and exert greater efforts in investment promotion to promote transfer of high-level industries from coastal areas. Particularly strengthen cooperation with large Chinese and international enterprises engaging in textile and garment, logistics and business and trade as well as intermediary organizations such as professional chamber of commerce and industry associations, actively introduce great brands, big companies and major projects, encourage and support continuous and comprehensive development, and promote aggregation and scale-oriented and well-supported industry transfer. Accelerate the construction of industrial cluster areas. To be specific, improve the construction of infrastructure, public service system and standardized workshops to create good conditions for accommodating industry transfer.

V. Policy Measures

(I) Give Greater Fiscal and Taxation Support. Implement relevant national preferential fiscal and taxation policies with respect to textile export rebates and VAT transition to ensure timely and full- amount tax refund, reduction or exemption. Encourage local governments to grant subsidies to key exporting enterprises by making use of retained local tax revenues. Actively ask for national funds and comprehensively use special provincial fiscal funds to support structure adjustment, technical transformation and energy conservation and emission reduction projects of textile enterprises. Formulate policies encouraging textile enterprises to establish proprietary brands and give necessary support to textile and garment enterprises in their efforts to hold special exhibitions and new product release conferences. Give priority to key textile R&D and industrialization projects to be included in the key scientific and technological and industrialization plan of this Province. Study and formulate support policies intended to grant incentives to enterprises by making use of local retained part of the VAT and income tax revenues imposed on newly established textile and garment enterprises in industrial cluster areas.

(II) Accelerate Industry Structure Adjustment. Formulate the Catalogue of Encouraged Textile Products in Henan Province, which will service as the guide for industry transfer accommodation and enterprise structure adjustment in various areas. Make a plan and layout of high-level printing and dyeing projects in consideration of industry layout and regional environmental capacity. Strengthen environmental law enforcement, improve energy consumption and emission standards, and eliminate equipment and enterprises with high energy and material consumptions and with over-standard emissions at a quicker pace. Strictly hold the pass for project accession and strictly prohibit high- consumption/pollution production capacities from relocating into this Province. Implement the joint review and approval system for major textile planning projects to further increase efficiency, simplify the procedures, and boost quicker project implementation.

(III) Boost Accelerated Industry Transfer. Formulate support policies intended to promote textile industry transfer and encourage adopting distance investment, tax-sharing, distance custody and cooperation and joint construction to promote industry transfer from outside this Province. In consideration of the planning layout of the industrial cluster areas in this Province, attach importance to the construction of about 30 specialized textile and garment parks, and give greater support in terms of land, fiscal and tax policy, financing and environmental protection to improve industry transfer accommodating capability. Support specialized textile and garment parks in their efforts to establish public service platforms with respect to product test, R&D, logistics and employee training to promote cluster-style industry transfer. The special investment promotion fund of the Province will grant reward to major textile industry transfer projects.

(IV) Expand Financing Channels for Enterprises. Financial institutions shall allow extension of loans due as appropriate and relax loan bad debt white-off conditions for textile enterprises with good fundamentals, obvious employment-driving force, marketable products and good credit records but with temporary financial difficulties. Actively make financial innovations, provide flexible and diversified services, and provide credit support to textile enterprises and key projects. Further improve small and medium-sized enterprises credit guarantee system and encourage guarantee institutions to credit guarantee and financing guarantee services for small and medium-sized textile enterprises around the development of industrial clusters. Support qualified textile enterprises in their efforts to seek financing by listing on the stock market and issuing bonds to expand their direct financing capabilities.

(V) Foster and Support Backbone Enterprises. Select 50 enterprises with good growth, which will be given preference in factors allocation, and will be developed into competitive enterprises with obvious scale benefits and strong driving force through project construction, asset restructuring and branding. Exert greater efforts in introducing competitive foreign enterprises and formulate relevant support policies regarding production base construction, product export and labor guarantee.

(VI) Strengthen Human Resource Building. Formulate policy measures intended to promote enterprises’ enhanced talents training and introducing to boost their talent team building. Actively guide experienced labor force working outside the Province to go back to start businesses or seek for employment. Encourage all localities to provide settling-in allowances and removal subsidies for external investors and introduced domestic and international medium/senior management personnel and technicians and do the best to solve problems in their lives concerning housing and school/kindergarten- entrance, thus to create a good working and living environment for them. Support textile and garment discipline construction by schools and colleges in this Province and strengthen school-enterprise cooperation. Support vocational-technical schools and peasant-worker training schools in their efforts to carry job-oriented vocational training according to the needs of enterprises in industrial clusters to provide skilled workers for enterprises.

(VII) Let Industry Intermediaries to Play An Organizing Role. Strengthen industry association building and give them appropriate support so that they can operate independently; Industry associations shall play a bridging and bonding role in communication between garment and enterprises, report the difficulties and problems in the course of industry development, strengthen industry self-discipline, and promote orderly competition and healthy development of the industry; encourage and support industry intermediaries to make industry researches to provide development planning, technical exchange, market survey, branding and other consulting services for enterprises.