Pay Attention To Tunisia'S Business Opportunities In Textile Industry In North Africa

On November 3, 2023, at the 6th China Textile Industry "Belt and Road" Conference, the Marketing Department of the China Textile Industry Federation, the International Trade Office and the Textile Industry Branch of the China Council for the Promotion of International Trade jointly released the 2023 National Guide for Foreign Investment and Cooperation in the Textile Industry. The compass introduced and analyzed the investment environment of 20 countries around the world, providing information guidance for textile enterprises to carry out the "Belt and Road" cooperation.

At the beginning of the new year, the Secretariat of China Textile International Capacity Cooperation Enterprise Alliance has been authorized to share the above report with you in 20 issues according to the regional scope, hoping to add impetus to the "Belt and Road" cooperation and double cycle high-quality development of textile and clothing enterprises.

　 Country Profile Geographic Environment

Tunisia is located at the northern end of Africa, facing Italy across the sea, bordering Algeria in the west, and Libya in the southeast, with a land area of 162000 square kilometers. It faces the Mediterranean Sea in the east and north, and its coastline is 1300 kilometers long. The northern part of Tunisia has a subtropical Mediterranean climate, mild and rainy in winter, hot and dry in summer; The southern part has a tropical continental desert climate, often with dry and hot monsoon and extremely hot summer; The central part has a tropical grassland climate.

　 natural resources

Tunisia's main mineral resources include phosphate, oil, natural gas, iron, aluminum, etc., with relatively rich reserves. Since there is no perennial river, the shortage of water resources has always been a prominent problem facing the country.

　 infrastructure

Tunisia's transportation is relatively developed. The road network can cover the whole territory. Land transportation currently accounts for 50% of the total freight volume of the country. At present, there are 30 ports, 8 of which are large commercial ports. At present, the expansion of Hades Port and the project of Amphida Deep Water Port are under planning. It has 9 international airports, which can lead to more than 50 overseas cities in Europe, Africa, the Middle East and other regions. At present, direct flights with China have not been opened. Tunisia has sufficient power supply, mainly thermal power and gas power generation, which can meet the needs of domestic industrial and agricultural production. The medical and health service network is relatively complete, and the level of health care is among the best in Africa and Arab countries.

　　 population distribution

Tunisia has a total population of 12 million and a working population of 4.11 million. With a population of 2.6 million, Tunisia, the capital, is the largest city and the national economic center. The Tunisian government attaches great importance to education, and nearly 1/4 of the population studies in schools at all levels. Tunisian national language is Arabic, and French is widely used.

　　 Macroeconomy

Tunisia's economy attaches equal importance to industry, agriculture and service industries. Its industry is dominated by phosphate mining, processing and textile industries. Tourism is the largest source of foreign exchange. In 2022, Tunisia's GDP will be 46.28 billion US dollars, and the per capita GDP will be 3820 US dollars. In recent years, Tunisia has continuously improved its investment and business environment. At present, it has attracted about 3900 foreign enterprises to settle in Tunisia, 75% of which export their products, with an investment of more than 40 billion dinars and more than 450000 jobs. Even during the COVID-19 epidemic, the investment of foreign enterprises in Tunisia has steadily increased. In the Business Environment Report 2020 released by the World Bank, Tunisia ranks 78th among 190 economies in the world. According to the 2023 World Investment Report of the United Nations, Tunisia will attract $710 million of foreign investment in 2022, with an investment stock of $39.47 billion. According to the statistical bulletin of China's foreign direct investment, the flow of China's direct investment in Tunisia in 2021 will be 6.52 million dollars, and the investment stock by the end of 2021 will be 33.47 million dollars. At present, Tunisia's economy is still in the recovery stage after the epidemic. The government has recently formulated a development plan for 2023-25, which aims to attract investment, create jobs, control trade deficits and stimulate economic growth.

　　 Current situation of textile industry

Industrial scale

The textile and clothing industry is Tunisia's traditional pillar industry, which plays a key role in earning foreign exchange through exports and stimulating employment. There are more than 1500 textile and clothing enterprises in the country, of which 1200 are export-oriented export enterprises, providing more than 158000 jobs. The export trade volume ranks second in Tunisia's industrial manufacturing industry. Tunisian textile and garment enterprises mainly provide production and processing for international brands, and their products have certain added value. In recent years, with its geographical advantages adjacent to Western Europe and its bilateral economic and trade cooperation policy with the European Union, it has attracted many European brands to establish processing plants or OEM in Tunisia. At present, it has established cooperative relations with more than 100 international famous brands, such as Adidas, Benetton, Diesel, Big Star, Levi's, Nike, Valentino, etc.

　　 international trade

According to the United Nations Statistics Division, Tunisia's textile and clothing exports to the world will reach 2.73 billion dollars in 2021, almost all of which will be exported to Europe (France accounts for 34%, Italy 21%, Germany 13%, the Netherlands 7%, and Belgium 7%). In the same period, Tunisia imported US $2.19 billion of textiles and clothing from the world, with the main import source countries being Italy (19%), France (16%), Turkey (14%), China (9%) and Germany (7%). According to the data of Tunisian Ministry of Commerce et du D é velopement des Exportations statistics, Tunisia's textile and clothing exports to the world will reach 4.2 billion dollars in 2022, and the main export products are woven and knitted clothing, accounting for 90%; During the same period, the textile and clothing imports from the world amounted to 2.42 billion dollars, and the main imports were cotton yarn and fabric (22%), knitted fabric (17%), chemical fiber yarn and fabric (24%) and other upstream products.

　　 Industrial layout

Tunisia's textile industry is mainly concentrated in Tunis, Sfax, Shaher and other places. In the eastern port city of Sfax, handicraft industries such as carpet weaving and leather processing have developed more. Susai, the third largest city in Hammamet Bay in the Mediterranean Sea, has large cotton textile, wool textile, leather making and other industries, and embroidery, lace and other handicrafts are also flourishing.

　　 Trade and investment policy Foreign trade policy

The EU is Tunisia's main trading partner. The two sides signed a free trade agreement in 2008, and Tunisian products can enter the European market free of tariffs. At the same time, Tunisia is a member of the League of Arab States, the African Union and the Maghreb Union, and has signed multilateral free trade agreements such as the Arab Mediterranean Free Trade Agreement and the Greater Arab Free Trade Area Agreement. Bilateral FTA agreements have been signed with Turkey, Egypt, Morocco, Jordan, Iraq and Libya, and preferential market access agreements have been signed with Guinea, Senegal, Burkina Faso, Niger and other African countries. Tunisian manufacturing products also enjoy tariff reduction and exemption from Japan, the United States, Canada, Switzerland and Australia.

　 Preferential policies for investment

From April 1, 2017, Tunisia's new investment law was officially implemented, aiming to encourage investment in international business and national priority development fields, so as to create employment, improve the comprehensive level of human resources, and achieve overall, balanced and sustainable development throughout the country.

Tunisian investment preferential policies are mainly reflected in tax relief, government subsidies, incentives and the government's bearing of employer costs. In terms of economic income subsidies, the government subsidizes the investment in equipment or non equipment to improve production by using new technologies, funds for research and development, and expenses incurred in training employees and making them obtain competency certification. In terms of employee skill development subsidies, for the sake of social security and stability, the state and employers jointly pay Tunisian employees who are employed for the first time for a long time, and the state pays some workers according to the contribution of enterprises to regional economic development. In addition, Tunisia has set up primary regional development zones and secondary regional development zones in industries, handicrafts and a series of service industries, and issued incentive policies with different preferential levels.

There are 97 industrial zones in Tunisia, with a total area of about 961 hectares. In addition, there are two tax-free zones in Bizerte and Zarzis. The preferential policies for the tax-free zones include: all taxes and fees are exempted for intra zone trade, but 20% taxes are required for public works, intra zone investment and employee wages; New enterprises will be exempted from all taxes in the first 10 years, and only half of the taxes will be paid from the 11th year; Funds and profits can be transferred freely in local currency or foreign currency.

　 exchange control

Generally, foreign enterprises can open foreign exchange and dinar accounts in Tunisian commercial banks with the approval of the Central Bank of Tunisia and the approval of the Ministry of Commerce. Foreign investors' profits (including business, production profits and capital income) and income from investing in equities in foreign exchange can be freely remitted out. The funds under the current account and the income from the physical transfer of foreign exchange imports and the transfer of foreign exchange capital funds (including the value-added part) that comply with the law can be freely transferred.

According to relevant Tunisian laws, the profit remittance of export-oriented enterprises after tax payment is not restricted, and the bank charges vary with the remitting bank. The profits remitted by non export-oriented foreign-invested enterprises after tax payment shall be subject to the supervision of the bank, and the enterprises shall prove that the capital invested by them is foreign exchange, which can be remitted through the Central Bank of Tunisia after approval.

Cooperation in textile industry between China and Tunisia

In recent years, the development of bilateral economic and trade cooperation between China and Tunisia has accelerated. Tunisia has become one of China's important partners in North Africa. In July 2018, China and Tunisia signed a memorandum of understanding to jointly build the "Belt and Road", and carried out fruitful cooperation under the "Belt and Road" framework. According to the statistics of Chinese customs, the bilateral trade volume of goods between China and Tunisia in 2022 will be 2.13 billion dollars, including 1.88 billion dollars of Chinese exports and 250 million dollars of imports from Tunisia. The export and import of textiles and clothing accounted for 8% and 34.8% of China's trade volume of outstanding exports and imports from the country, respectively.

In 2022, China will export US $170 million of textiles and clothing to Tunisia. Its main export products include knitted fabrics (26.2%), chemical fiber yarns and fabrics (33.3% of chemical fiber staple and filament yarns and fabrics). During the same period, China imported US $87.12 million of textiles and clothing from Tunisia, mainly knitted and woven clothing and clothing accessories, accounting for more than 97.5%.

　　 Summary and suggestions

(1) Tunisia has a superior geographical position, close to the European market, and enjoys preferential trade policy arrangements to enter the European market. More than 100 international well-known brands have established processing plants or OEM in Tunisia.

(2) Tunisia has a high proportion of working population, good education, certain skills and low wages. The government encourages foreign investors to invest in the textile and clothing industry, especially in the upstream textile industry. It is committed to developing a relatively complete textile and clothing industry chain, and has formulated a series of preferential policies such as tax relief, government subsidies, incentives, and government borne employer fees. The investment environment is generally good.

(3) Tunisia's textile industry is weak in spinning, weaving, dyeing and finishing, and garment enterprises mainly process raw materials imported from Europe. China's textile industry still has room to deepen industrial cooperation, expand investment and trade exchanges with Tunisia. Chinese textile enterprises can consider building garment processing bases in Tunisia, and supporting the development of spinning, weaving, dyeing and finishing and other production links in the upstream of the industrial chain as appropriate.

(4) There are unstable factors in Tunisia's social, political and economic security. Some group events, strikes and protests in recent years have affected the construction projects and normal business of Chinese enterprises. Investment enterprises need to pay attention to the political, economic, social and security situation in Tunisia at any time.

(5) According to relevant local laws and regulations, when foreign capital opens a trading company in Tunisia, local partners must account for more than 51% of the company's shares. Enterprises with investment intentions need to pay special attention to this. In addition, in recent years, international trade disputes caused by payment and quality of goods have occurred frequently. When conducting trade cooperation, trade partners and payment methods should be carefully selected, full consideration should be given to possible risks, and preventive measures should be taken in advance.