According to the latest news released on the website of the Ministry of Commerce on October 27, a report released by the Ministry of Industry and Trade of Vietnam shows that the country’s annual textile exports are as high as 40 billion U.S. dollars. However, more than 54.9% of the 10 billion meters of exported fabrics require Imported from China, only 25% of the fabric is produced locally in Vietnam.
Based on this analysis, Vietnam believes that the country’s textile industry will find it difficult to benefit from the Vietnam-Europe Free Trade Agreement, because a large amount of raw materials need to be imported, which does not meet the EU’s origin standards. In view of the fact that South Korea, like Vietnam, has signed a free trade agreement with the European Union, if local clothing and textile companies in Vietnam want to enjoy the preferential policies in the free trade agreement, they can consider expanding imports from South Korea.
That is true, but whether South Korea’s production capacity can meet Vietnam’s demand is a question. Data shows that Vietnam’s annual imports of fabrics from South Korea account for 15.2% of the total imports, which is a small share. In addition, Vietnam also found that if it wants to develop fabric production capacity on its own, an additional investment of 30 billion U.S. dollars (equivalent to 203.1 billion RMB) is needed, and the tension on hand is precisely because the textile industry has not been able to break through the “production bottleneck”. Important reason.
The report pointed out that Vietnam’s textile industry not only has limitations in terms of production capacity, but even worse, the textile industry’s supporting cotton, yarn, dyeing and finishing fields simply “cannot keep up” with the country’s garment processing needs. Therefore, the garment processing industry in Vietnam currently only stays at the lowest end of the sewing process, with low added value.
In contrast, my country’s textile industry has become a global leader since its development in 1978. During the epidemic this year, my country has played a key role as the world’s largest textile producer and has become an important source of supply of epidemic prevention materials for all countries. Statistics show that from January to September this year, my country’s textile exports including masks, protective clothing, and clothing reached US$215.78 billion, a year-on-year increase of 9.3%.
Seeing that China’s textile industry has continued to order overseas, Vietnam has again “think carefully”. The aforementioned Vietnam-EU Free Trade Agreement is part of Vietnam’s plan. It is reported that Vietnam intends to use preferential tariffs to expand exports to the EU, thereby shaking up China’s share of textile exports. However, according to the forecast of the Vietnam National Textile and Apparel Group (Vinatex), Vietnam’s textile and apparel exports in 2020 will fall by 20% compared with 2019.
Faced with the catching-up signals sent by Vietnam, India and other countries in the textile industry, China itself is stepping up actions to maintain its advantage. On June 18th, the Ministry of Commerce of my country formally issued an announcement announcing that from July 1st this year, nearly 97% of Bangladesh’s tax items will be exported with “zero fees.” We must know that Bangladesh is currently the world’s second largest textile country. Strengthening cooperation with China this time will undoubtedly bring strong support to the economic development of both parties.