A multimillion-dollar incentives package is helping attract Chinese garment makers to build a $20 million plant in Little Rock, Arkansas by the end of next year. In exchange for tax breaks and grants, Arkansas has been promised 400 new jobs over four years from the Tianyuan Garment Co in Suzhou Industrial Park.

One of the most significant perks the Arkansas Economic Development Commission (AEDC) given to Tianyuan is $500,000 towards training workers to work with highly automated robotic equipment. This is also significant because, according to a China Labour Bulletin report, a key issue for China’s government officials is the extent to which the country’s labour market can provide employers well-trained workers they need. In other words, there is a skills gap in China.

AEDC’s incentive package includes five years of ‘Create Rebate’ program, a benefit of about $1.6 million. The program provides annual cash payments of up to 5 per cent of a company’s annual payroll for new, full-time, permanent employees. For Tianyuan, it would be 3.9 per cent. It also includes a tax back program, a benefit of about $134,000 which provides sales and tax refunds on the purchase of building materials and taxable machinery and equipment. A $1 million Infrastructure Assistance Grant for building improvements and equipment at the site. Support for 20 work visas for the company’s employees among others