PPE

Vietnam Textile threatens China’s “leader” status, textile enterprises compete to “leave” Vietnam as the first choice

According to the analysis of big data of bitport: the import and export data released recently make China’s trade worried. This paper explains the reason why China’s export is continuously transferring to Southeast Asian countries from the perspective of textile industry: since 2007’s accession to the WTO, Vietnam’s export of textile, cloth and clothing has increased rapidly. Last year, Vietnam became the eighth largest exporter in the world, accounting for only one percent of global exports after China< Since joining WTO in 2007, Vietnam's export of textile, cloth and garment has been increasing rapidly. Last year, Vietnam became the eighth largest exporter in the world, accounting for only one percent of global exports after China. The label of made in Vietnam is being used more and more on Zara, gap, Nike and other international famous clothing brands. Vietnam has become the most potential country in Asia to replace China's textile industry. From spinning manufacturing to garment manufacturing, especially with the advance of the TPP agreement signed between Vietnam and the United States, Vietnam's clothing exports to the United States, Japan and South Korea have expanded and increased, which is second only to China in the U.S. market< As the trend of the times, the textile industry is shifting from China, the decline of export market, the rising cost of domestic upstream raw materials and the rising price of labor and other production factors are becoming obstacles in the development of textile enterprises. Affected by the weak international economic environment such as the European debt crisis and the U.S. debt crisis, the export performance of Chinese textile enterprises in Europe and the U.S. has fallen sharply, and the orders have decreased. The change of the U.S. dollar exchange rate also brings certain risks to the enterprises to receive orders at present, it is difficult for textile enterprises to receive orders for foreign trade, and the inventory pressure is high. At the same time, due to many factors such as rising labor costs, fluctuations in raw material prices, and rising loan interest rates, China’s textile industry will once again fall into the pattern of reshuffle, and the export situation is not optimistic on the other hand, the price difference between China and the world continues to be too high, and the cotton cost of China’s cotton textile enterprises is at an international competitive disadvantage. Not only the cotton textile enterprises, but also the textile enterprises including the downstream textile and garment enterprises are facing huge competitive pressure. The cost of using cotton is higher than that of the international market, which has been a long-term problem for the development of China’s textile industry, especially in the past half a year when other costs have increased rapidly, which has led to the decline of China’s textile industry’s international competitiveness to a great extent. Because of this, Chinese textile enterprises, such as Blum Oriental and Tianhong textile, have to solve their difficulties through the layout of overseas production capacity< 1n Asia, Vietnam, Cambodia, Bangladesh and 1ndonesia have become OEM bases for international clothing brands, and Vietnam is emerging with the most prominent regional environmental advantages. Among these countries, Vietnam's regional environment is obviously better than other countries. Vietnam is rich in electricity, water resources, political stability and relatively high quality of personnel. The efficiency of clothing workers is about 70% - 80% of that in China, which is much higher than that in other countries< At the same time, the cost advantage of investment in Vietnam is very obvious. Vietnam's small and medium-sized enterprises are small in scale, and the investment fund for a medium-sized enterprise is only US $1 million to US $1.5 million. The largest fund for small enterprises is about US $10.2 million, and its land price is the cheapest among Southeast Asian countries. 1n the past, the price of a Vietnamese textile mill was about 1 million Dong (about 60000 US dollars). After the outbreak of the financial crisis, the price of the factory fell by 40%. Under the background of the continuous appreciation of the RMB, it is conducive for Chinese enterprises to go to Vietnam to buy factories therefore, at present, the cost of investment in Vietnam is low, and for the general small and medium-sized enterprises, the initial investment burden is small the rising labor cost in China not only forces many international clothing brands to move their OEM factories to other Southeast Asian countries, but also makes Chinese spinning enterprises unable to bear the burden. Compared with nearly 3000 yuan of textile workers’ wages in China, Vietnam’s labor force is rich and cheap, half of that in the Yangtze River Delta and Pearl River Delta. Take the salary of garment workers as an example, the labor cost of garment workers in Vietnam is only about 1000 yuan. The value-added tax of enterprises is only 10%, and the water and electricity charges are only half of China’s, which can further reduce production costs in addition, after Vietnam and the United States signed the trans Pacific Partnership Agreement (TPP), the main manufacturing processes of spinning, weaving and printing and dyeing are carried out in the member countries, which can enjoy export tariff reduction. Tax free treatment will further enlarge the global competitiveness of Vietnam’s textile manufacturing industry under the background of low processing cost advantage. For Vietnam’s textile enterprises, the order volume is expected to further increase< From 2009 to 2015, the average annual growth rate of Vietnam's textile and clothing exports reached 18.6%, 6 percentage points higher than that of China in the same period. China's market share in Japan's textile and clothing imports also dropped rapidly from more than 80% to less than 70% last year< According to statistics, Vietnam's national yarn production capacity is about 6-7.5 million spindles, and 82% of the yarn produced locally is exported to China, 1ndonesia and other places; The export of knitwear increases by 30% every year. 1n 2015, the export of knitwear has reached 28.3 billion US dollars, but 88% of the fabrics are imported from China and South Korea< According to foreign experts, 2015 is a good opportunity for Vietnam's textile and garment industry to make a breakthrough. At present, Vietnam is evaluated as a highly competitive country in the global textile supply chain. Therefore, global investors regard Vietnam as an ideal textile production center for export. 1n 2014, 20 new FD1 projects were approved in this field. At present, the textile industry has attracted more than US $2 billion in investment Vietnam Textile Association (vitas) believes that if the free trade agreement and trans Pacific Partnership Agreement with South Korea, European Union, Russia, Belarus and Kazakhstan customs union are signed in early 2015 as originally planned, Vietnam will surely usher in many new opportunities. The textile industry strives to achieve the goal of US $28-28.5 billion in total exports by 2015. Therefore, Vietnam is likely to become a major textile exporter recently, the Ministry of industry and trade of Vietnam has also formulated the draft of “2020 development plan and 2030 prospect plan of Vietnam’s textile and garment industry” to re plan the textile and garment industry to meet the international demand. “Vietnam is increasingly integrating into the international economy in depth and breadth, and has signed bilateral and multilateral cooperation agreements with 80 countries in the world. This requires innovation in the textile and garment industry to meet the actual demand. “ preferential tariff makes it more healthy to enter the international market Vietnam’s preferential tariff conditions make it very convenient to enter the international market. Even if Europe and the United States impose anti-dumping duties on Vietnamese products in the future, the tariff rate will certainly be lower than that of China. Globally, the total export volume of Vietnam’s products is far less than that of China, so punitive tariffs of 30% – 40% may be imposed on China, but only a few to more than 10% on Vietnam. On the other hand, Vietnam’s GDP is only over 100 billion yuan, which is hardly a threat to Europe and the United States many Chinese enterprises invest in Vietnam based on the global layout of enterprises, hoping to enter the ASEAN market through Vietnam. Some enterprises have said that the customs duties of some Vietnamese imports can be saved by transporting parts into the Vietnamese market for assembly and turning them into finished products for sale in the local and even ASEAN markets, because the customs duties of parts are low, while the customs duties of finished products are much higher some enterprises are close to the origin of raw materials. Blum Oriental Co., Ltd. is one of them: in order to protect the development of domestic agriculture, China generally imposes high tariffs on the import of foreign cotton. After moving to Vietnam, it can avoid the high tariffs caused by the import of cotton after years of sustained high-speed growth, Vietnam has become a “rising star in Asia”. The Economist 1ntelligence Unit of the UK has listed Vietnam as the most attractive destination for foreign direct investment of emerging market countries after “BR1Cs” for many years. Vietnam is of great significance to the implementation of China’s “going out” strategy. 1f this kind of “going out” of Chinese enterprises is in the form of withdrawing from China, combined with the continuous withdrawal of foreign capital due to operating costs and the weak global economy, it will cause greater pressure on China’s exports and economy, which is believed to have been reflected in the weak import and export data Video: Vietnam accelerates the development of textile industry Vietnam’s textile and garment industry has great development potential. At present, Vietnam has 2.5 million textile workers, 6.2 million spindles, 1.7 billion square meters of fabric output and 24 billion US dollars of clothing exports. 1t is estimated that by 2025, the number of textile industry workers will increase to 5 million, spinning will increase to 17.9 million spindles, fabric production will increase to 12 billion square meters, and clothing export will increase to 40 billion US dollars. The Vietnamese government issued a series of policies to encourage the development of the textile industry, and invested in infrastructure. At the same time, it also established some large industrial parks to attract investment. For example, there are 1400 hectares of industrial parks in Nanding Province, 600 hectares in Xining province and 600 hectares in Guangning Province, and sufficient human resources have also laid a good foundation for the development of Vietnam’s textile industry why Vietnam is the first choice for textile and fabric enterprises to “run away” in recent years, domestic textile and garment enterprises have been plagued by many problems, such as difficult recruitment, high labor costs, rising raw material costs, too many homogeneous products, and declining export profits. 1n order to win development in the fierce market competition and achieve better resource allocation, overseas transfer and foreign investment of China’s textile and garment industry have become the general trend of China’s textile and garment industry to adapt to domestic industrial, economic and social development and international economic development. As a typical labor-intensive industry, cost reduction is the main driving force of textile and garment industry transfer it is precisely for the above reasons that Chinese enterprises’ foreign investment has developed rapidly. According to a series of data given by Chen Zhong, there are nearly 30000 Chinese enterprises investing abroad, among which 802 enterprises have been invested in the textile and garment industry. Among them, a number of powerful international enterprises have been formed “Vietnam is the first choice for China’s textile industry to go global.” Hong Tianzhu, chairman of the board of directors of Tianhong Group, thinks that it is also a kind of exercise for Chinese enterprises. Among the 12 TPP signing countries, only Vietnam’s textile and garment industry is the most competitive. He suggests that all capable Chinese enterprises go to Vietnam to set up a factory. “But not all enterprises are suitable for going out. 1f they can’t go out in China, it may not be good. Although Vietnam is good, But it’s not like going to Vietnam solves all the problems. ” 1t is reported that in the meantime, the investment volume of Tianhong has 1 million 250 thousand ingots in Vietnam, and the investment scale is 800 million US dollars, which is the first scale of the investment scale of Chinese mainland enterprises. SUN Weiting, chairman of Huafu color textile Co., Ltd., even thinks that “Vietnam is a place that we have to go”. According to him, following the layout of production plates in Zhejiang, Yangtze River, Huanghuai River and Xinjiang, Huafu began to make international layoutâ€?The establishment of a subsidiary in Vietnam has reduced the impact of the current domestic and foreign price difference of the company’s main raw materials on the cost, made full use of the advantage of low local labor cost, reduced international logistics costs, effectively avoided tariff barriers, and further improved the cost competitiveness and service capacity of ASEAN market. ” Sun Weiting said that going to Vietnam is not only a good choice for customers and the market

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