Can Vietnam’s textile & garment industry benefit from the trade war?

VietNamNet Bridge - The textile & garment export turnover in the first 10 months of the year reached $25.15 billion, an increase of 17.1 percent compared with the same period last year, partly due to the trade war between the US and China, according to the Ministry of Industry and Trade (MOIT).


vietnamnet bridge, english news, Vietnam news, news Vietnam, vietnamnet news, Vietnam net news, Vietnam latest news, vn news, Vietnam breaking news, textile & garment export turnover, MOIT, FTAs

The textile & garment export turnover is on the rise




The US continues to be the biggest export market for Vietnam, bringing about 50 percent of total export turnover. 

MOIT confirmed that exports increased sharply partly thanks to the trade war as orders left China for Vietnam.

Vietnam is expecting rapid growth rates in the export of textiles and garments, which will see the biggest benefits from the US-China trade war.

The Chinese yuan is depreciating against the US dollar and against the Vietnam dong as well. This allows Vietnamese enterprises to import fabric and input materials from China at lower prices. 

Meanwhile, Vietnam can obtain bigger market share in the US as fewer Chinese products can enter the market. However, Vietnamese businesses warn they should not be ‘excessively optimistic’.

Luong Van Thu, general director of Dap Cau Garment Company in Bac Ninh province, specializing in exports to the US, South Korea and Europe, said things went well in the first 10 months of the year, but the number of orders will decrease in the last two months.

“Partners have visited our company, but have not officially placed orders. Some partners are still exploring the situation with small long-term orders,” he said. 

Thu said partners worry that input material imports from China may increase in price. 

Meanwhile, Vietnam, in order to grab the opportunity, needs to compete with other regional rivals such as Indonesia, Cambodia and Myanmar, where the labor cost is lower than in Vietnam.

The companies with production bases in China are thinking carefully about whether to leave the market. The companies will only move to Vietnam if they are sure that profits in Vietnam will be at least equal to China.

The companies with production bases in China are thinking carefully about whether to leave the market. The companies will only move to Vietnam if they are sure that profits in Vietnam will be at least equal to China.

Nguyen Hong Giang, deputy chair of the Vietnam Cotton & Spinning Association, warned that foreign manufacturers, mostly Chinese, may establish production chains (making yarn, fabric and garments) in Vietnam to avoid sanctions by the US.

If so, Vietnamese enterprises would not get big benefits as expected, because most of them only have experience and advantages in making garments, while they have to import input materials.

Thu said enterprises now tend to import materials from other sources rather than from China to minimize risks. 

Vietnam plans to export $35 billion worth of textiles and garments this year.


RELATED NEWS

Garment manufacturers feel pressure from foreign fashion brands

Vietnam competes with China to become top garment exporter in South Korea


Nam Mai

vietnamnet bridge, english news, Vietnam news, news Vietnam, vietnamnet news, Vietnam net news, Vietnam latest news, vn news, Vietnam breaking news, textile garment export turnover, MOIT, FTAs
 
*
*
*
  Send