Shen Danyang, a spokesman for the ministry, told a press briefing in Beijing that the government’s “One Belt, One Road” initiative had helped boost business cooperation between Chinese and foreign firms.

During the first nine months, more than 4,000 engineering contracts were signed by Chinese companies in 61 countries along the Belt and Road routes, the ministry figures showed, with combined contract value of US$74.56 billion.

According to Xinhua, at least 100 mainland based textile companies, for instance, had invested in or set up 2,600 overseas companies globally by the end of 2014, in an effort to cut costs and avoid toughening trading barriers.

Most of those have been in Asia, but there has been rising interest in setting up shop in Africa.

According to greenfield investment monitor fDi Markets, a service from the Financial Times, China-sourced capital expenditure into Africa experienced a dramatic 515 per cent increase in 2016 from 2015 figures, with five months of data to record and publish remaining, to US$14 billion.

Roger Lee, the CEO of TAL Group, told the Post that he already plans to shutter one of its textile plants, in the southeast Chinese city of Dongguan, by the end of the year, and is setting up a new manufacturing site in Hawassa, Ethiopia.

The Hong Kong-based textile and garment manufacturing has 25,000 employees with factories in the mainland, Hong Kong, Thailand, Malaysia, Indonesia and Vietnam.

But Lee said the rising cost of doing business domestically means Ethiopia offers a lower-cost alternative, along with duty-free trade status with the all-important US market.

TAL’s investment in the first three years there is expected to be US$10 million.

“Wages in China have doubled in the past five years, and other countries [nearer home] have seen double-digit annual rises, so we had to consider an alternative in which to extend our footprint.”

Compared with other countries in Asia, wages in Ethiopia are a third of Vietnam, for instance, TAL’s current most cost-effective manufacturing base.

Hawassa has a population of 5 million within a 80.5 kilometre radius of its centre, and a poor transport system with few buses, so the company has had to arrange shuttle services to bring its workers in and out of the factory.

Although construction is four and a half months behind schedule, Lee has hired 200 employees already and sent them to Indonesia for training. The plan is to have 10,000 employees within three years, which could include opening a facility in Tanzania.

“Eventually every country will see its costs pushed up, as what’s happening in Vietnam today and what China has experienced – so companies like us have to start making long term plans,” he said.

TAL closed down its Taiwan plant in 2009 due to rising costs, and two years earlier shuttered one in Mexico which proved too remote as a manufacturing location.

Fellow textile company Jiangsu Sunshine, which specialises in woollens manufacturing and is also listed in Shanghai, also has African expansion plans.

Chairman and CEO Chen Lifen said it took the company five years to plan its move, also to Ethiopia, where it has now invested almost US$1 billion in a factory.

“I thought we could survive with all our production based in the Chinese mainland. But now I know that would be impossible, and I was under pressure to find a way out,” he said.

The first phase of its Ethiopian development is expected to be finished by the end of the year, and output will be worth around a third of that currently generated by its manufacturing base in Wuxi, in Jiangsu province.

Chen said she first started looking at alternative manufacturing bases in Southeast Asia as early as 2010, but gave up on expanding in the region due to a lack of confidence in local infrastructure.

“In the past year we have really been feeling the pinch, and have seen more overseas clients transferring their orders to markets outside of China,” she said.

“With more free trade pacts being created, such as the Trans Pacific Partnership, we started finding ourselves becoming isolated,” Chen said, adding Jiangsu Sunshine’s revenue dropped 9.52 per cent to 2.27 billion yuan last year.

China’s exports of textiles and garment suffered contracted in 2015 for the first time in six years, with the value dropping 4.9 per cent to US$283.9 billion from a year earlier, according to official data.

Exports to Japan and Europe tumbled the most, which companies blamed on the weakened currency and rising labour costs, which surged more than 200 per cent from 2008.

Last year total textile trade, including exports and imports, fell a combined 7 per cent in renminbi terms and 8 per cent in US dollar terms.

According to statistics from the All-China Federation of Trade Unions, average wages in China have been growing at an annual compound rate of 12.2 per cent, rising from 4,538 yuan per year in 1994 to 45,676 yuan per year in 2013.

The increased wages have helped with the government’s aim of increasing domestic consumption, but have also fuelled the country’s runaway housing market and reduced its competitiveness when it comes to labour costs.