Can Vietnamese Made Textiles Go To A New Historical Height?

In early 2014,

The Vinatex said the Vietnamese textile industry would be able to achieve its target of 25 billion US dollars by 2020 before the US led p Pacific Strategic Economic Partnership Agreement (TPP) was signed.

At present, Vietnam is carrying out many negotiations for signing TPP with the parties concerned.

According to Vietnamese media reported on October 19th, in order to achieve the goal of turnover of US $1 billion over the next 5 years, Vietnamese textile enterprises have proposed solutions to expand production, increase production line technology investment, and improve raw material self-sufficiency.

Beyond all doubt,

Vietnam will bring new opportunities to Vietnam's textile enterprises to get more opportunities for development, but at the same time, Vietnamese textile enterprises are also facing enormous pressure and challenges.

Can Vietnamese made textiles go to a new historical height?

Garment export tax or sharp decrease of 12%-32%

Recently, according to Reuters, Washington intended to promote an agreement.

Under this agreement, Vietnam will become one of the big winners in the member states of the p Pacific Strategic Economic Partnership (TPP), and will gain some share of the garment market from China and other non member states.

Mexico or Central American countries will not benefit from it.

Today, thanks to the regional trade agreement, half of the yarn and cloth products in the United States will be exported to the south of the border, where cheap labor can be used to make them into ready-made garments.

In most cases, these

It will become a tax-free product for us consumers to buy back.

Garment industry is Vietnam's priority development industry.

But the clothing industry is only one of many problems that other countries need to consider.

As a return to Washington on textile issues, these countries may seek concessions in other areas.

Other countries that have joined or will soon join the TPP include Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru and Singapore.

The treatment of different industries depends on the economic impact of the United States.

In fact, this will mean that the parties concerned will have to wait longer to reduce tariffs on underwear and men's knitted shirts and other cotton fabrics.

Central American countries have more market share in these areas.

China's dominant products, including down coats and synthetic fiber garments, will soon reduce tariffs and bring some advantages to Vietnam.

In fact, even if tariffs impose a 1/3 increase in the cost of their products, Vietnam's exports to the United States have increased by 38% since 2010.

According to the relevant model of Pedersen International Economic Research Institute, Vietnam's exports will increase by 46% by the end of 2025, while exports from Mexico, China and India will decrease.

The higher labor and environmental standards stipulated in the new agreement are expected to push up production costs in Vietnam.

However, if we only consider the cost of labor, the US and the Central American countries will not match their Asian rivals.

In the mid 2014, China's share of the apparel market in the United States dropped from over 39% in 2010 to less than 37%.

Vietnam's share of the apparel market in the United States increased to more than 10%.

Julia Hughes, the head of the American fashion industry association, said: "Vietnam's clothing is already cheaper than China's.

After the implementation of the tax exemption policy, the tax rate will be reduced by 12% to 32%.

This will make a huge difference. "

China's Ministry of commerce did not respond to any questions.

The China Textiles Import and Export Chamber declined to comment.

TPP drives foreign invested enterprises to invest more

Because TPP's tariff relief is conditional, the main manufacturing processes such as spinning, weaving and dyeing must be carried out in TPP member countries.

In order to enjoy tariff reduction and exemption policy, many enterprises are actively moving factories to Vietnam.

The income of some garment manufacturers increased by 50% in 2013.

Vietnam's textile exports increased by 20% in the first quarter of this year.

Textile enterprises from many countries and regions in the world have set up production plants in Vietnam, or are stepping up their pace to enter Vietnam, many of which are international brands.

However, it is also reported that because Vietnamese clothing manufacturers do not have large capital reserves, it is difficult to invest in establishing their own yarns and textile factories, mainly relying on China and other Southeast Asian countries.

Some economists point out that in the textile and garment industry, the signing of TPP will mainly benefit foreign investment enterprises, rather than Vietnamese local enterprises.

Now, the Thailand garment manufacturers association has regarded Vietnam as an attractive investment destination.

Vietnam reported on October 28th: the Thailand Garment Manufacturers Association said that the EU import tariffs on Thailand textile and clothing products will be raised from 9.6% to 12%, which will make Thailand textile and garment products lose competitiveness to a certain extent.

To cope with this situation, Thailand textile and garment enterprises are planning to pfer their production lines to neighboring countries such as Vietnam and Burma, which have low labour costs and enjoy a generalized preferential tariff system (GSP).

At present, about 30 Thailand textile and garment production enterprises have second manufacturing plants in neighbouring countries, mainly in Vietnam and Kampuchea.

According to reports, Shenzhou International manufacturer of knitted apparel products in China recently said in a mid-term report that the trade policy of the major importing countries is severe and manufacturing costs are rising, which are reducing market share.

The company plans to set up a fabric and garment factory in Vietnam.

Other Chinese funded enterprises are also planning to use Vietnam as a base, such as Tianhong textile and mutual textile.

"Made in Vietnam" will be squeezed "made in China"?

According to Reuters, industry experts believe that TPP will stimulate further changes in the global textile and clothing trade.

China's share of clothing market in the United States in 2010 was 39%, which has dropped by 37% in the mid 2014, while Vietnam's share in the US apparel market has climbed to more than 10%.

"Vietnam's manufacturing cost is lower than that of China, and the duty-free offer at that time may provide 12%-32% tax cuts, which will have a huge impact."

JuliaHughes, chairman of the American fashion industry association.

According to the journalist Krista Hughe, if the United States can achieve its success in TPP negotiations, "made in China" will no longer be so common in American clothing stores.

In terms of exports, according to statistics from the Vietnamese Customs Department, the export volume of knitted goods in Vietnam's textile industry reached about US $1 billion 900 million in the first 9 months of this year, and textile exports increased to US $15 billion 510 million, an increase of 18.9% over the same period last year.

Fan Chunhong, vice president of Vietnam textile and Apparel Association, said that after Vietnam's accession to TPP, Vietnamese enterprises will enjoy more preferential tariffs, so this is also a driving force for Vietnamese enterprises to expand export markets, especially the US market share.

By then, the target of turnover of US $1 billion in 5 years will be relatively easier for some large enterprises in the industry.

However, Vietnam's textile industry is still heavily dependent on imports in the fields of raw materials and accessories.

Vietnam's competitiveness is still weak.

Therefore, Fan Chunhong said that in order to vigorously develop Vietnam's domestic raw materials and auxiliary materials, the Vietnamese textile industry enterprises should strengthen close cooperation in the manufacturing process of fiber textile printing and dyeing sewing, and gradually pfer the production form from processing FOB (raw material procurement, semi finished goods) to ODM (independent design, production and sale of products).

Only in this way can Vietnamese enterprises be able to achieve sustainable and healthy development in the fierce competition market.