China's Xinjiang Uygur Autonomous Region plans a fund of 20 billion yuan (about 3.2 billion U.S. dollars) to support the textile and clothing industry, officials said Friday.
The fund will be part of a package to increase employment and incomes and maintain social stability, Yan Qin, deputy secretary-general of the Xinjiang regional government, told a press conference in Beijing.
The central government will contribute part of the fund and Xinjiang will raise the rest.
Apart from funding textile industrial parks and clothing factories, Xinjiang will subsidize local cotton and electricity in qualified textile industrial parks. The region will adopt strict environmental protection standards and control energy consumption during the process.
According to a 10-year textile development plan, 420,000 jobs will be created with an industrial output of about 86 billion yuan by 2018 and 1 million jobs and 212.5 billion yuan of output by 2023.
The fund will favor southern areas of Xinjiang. Clothing and tapestry factories there will enjoy free or low rents for a designated period, Yan said, adding that language and vocational training centers will open in southern Xinjiang.
In northwest China and home to more than 22 million people of 47 ethnicities, Xinjiang now produces about 60 percent of the China's raw cotton, but most textile companies are in eastern coastal areas far from Xinjiang.
The lack of factories has meant low demand from local enterprises. With poor rail links to the rest of the country, Xinjiang's cotton farmers have felt the pinch in recent years.
Furthermore, China keeps a tight grip on cotton imports to protect farmers, driving domestic cotton prices much higher than imports. In April, the government announced that it would suspend temporary cotton purchases after national cotton reserves reached 12 million tonnes, an amount that could meet domestic demand for the next two or three years if domestic consumption remains at the current level.
Gao Yong, vice president of China National Textile and Apparel Council,said he believes more textile companies will open production lines there and use more local cotton to reduce costs.
The abundant energy resources in Xinjiang will also help enterprises integrate their industrial chain and tap new markets, Gao said.