Vietnam Has Issued Policies To Improve Textile And Apparel Industry Chain

Global trade encounters Waterloo

Against the backdrop of Global trade turmoil, the latest data from Japan, Germany and the euro area show that the main exporters' power continues to languish, and trade activities are weak enough to create confidence in manufacturing industry.

In February, the initial value of Japanese manufacturing PMI data dropped to 48.5, the lowest level in 32 months. In addition, according to Japan's Ministry of finance information, exports in February dropped by 8.4% compared with the same period last year, far below the previous value and expectations.

As the leader of the European economy, the PMI value of the German manufacturing industry dropped to 47.6 in February, the lowest in 74 months. At the same time, export orders are the biggest drop in more than six years.

The initial PMI value of the manufacturing sector in February fell to 49.2, the first time since June 2013.

The World Trade Organization (WTO) released the global trade quarterly Outlook Index of 96.3, the lowest since March 2010. The index covers several major drivers of Global trade. The figure below 100 means that global trade growth is below trend.

WTO said in a statement that the continued loss of trade momentum highlights the urgency of easing trade tensions. Trade tensions, coupled with continuing political risks and financial turmoil, may herald a broader economic downturn.

WTO expects global trade activity to grow by only 3.7% in 2019, slowing down from 3.9% in 2018 and possibly further.

Feel cool in domestic textile industry

Under the backdrop of weak global trade growth, the domestic textile market also feels cool. Since the beginning of this year, the boom of the textile market has been on the low side, and many downstream weaving factories have been postponed.

And to the traditional textile peak season, "golden three silver four", the market has not been as popular as ever. "The beauty of the receipt of hand cramp" has not long been expected. Especially in the middle and late April, the market is rapidly turning cold. The most busy time is extremely idle, and the fabric dealers dare not store up the goods.

The ambition of Vietnam and other Southeast Asian countries in the textile industry

Never underestimate Vietnam's ambition to become a "world factory".

Changes in gross domestic product in Vietnam

Since the reform and opening up in 1986, Vietnam's GDP growth rate has remained around 6% - 7% for many years, up to 7.08% in 2018, reaching a 11 year high.

Over the years, more and more foreign capital has been favored by Vietnam. In 2018, Vietnam attracted foreign investment amounting to US $35 billion 460 million, actually reaching US $19 billion 100 million, an increase of 9.1% over the same period last year.

Vietnam exported $244 billion 700 million in 2018, and imports and exports totaled US $428 billion 800 million, equivalent to two times that of GDP, which ranks second in Asia, after Singapore.

While the domestic textile industry is struggling, Southeast Asian countries, represented by Vietnam, are rapidly catching up with the textile market. As we all know, with the rapid rise of domestic production costs and labor costs, the textile industry is spanferring to Southeast Asian countries in large volume, and Vietnam is one of the most important countries to undertake the spanfer of China's textile industry. At present, Vietnam has become the third largest textile exporter in the world, second only to China and India.

Vietnamese textile, a competitive competitor

On April 24th, Vietnamese Vice Premier Zheng Dingyong signed the government's decision on 18/2019 /Q. -TTg, which prohibits the import of machinery, equipment and production lines with a technology life span of 10 years or more, and will take effect in June 15, 2019.

This means that Vietnam will no longer be satisfied with the production market of clothing, and will directly enter the fabric and raw materials market. It can be briefly summarized as follows: if all textile enterprises put into production in Vietnam want to enjoy tariff preferences in Vietnam, the origin of raw materials such as yarns, fabrics and accessories for textiles must be in Vietnam (at least 90% of the country's origin).

As a result, all textile enterprises put into operation in Vietnam have to reduce their dependence on China's fabric and raw materials supply, thus increasing investment in Vietnam's textile industry and improving the industrial chain. This is a great challenge for China's textile industry.