Tiếng Việt
Every year, Vietnam earns tens of billions of dollars from textile exports, but businesses in this industry only make a profit of about $2 billion. Having this modest “profit” is because for many years, the textile and garment industry is still spending more than half of its revenue to import raw materials and accessories.
According to recent statistics of the Ministry of Industry and Trade, Vietnam is providing only 0.3% of the demand for cotton, 40% of the demand for fiber. In particular, although weaving produces nearly 2.8 billion meters of fabric per year (accounting for 30% of demand), it still has to import 6.1 billion meters of fabric from countries such as China, Korea, and Taiwan.
According to a report of the Ministry of Industry and Trade, in 2016, the export turnover of Vietnam’s textile and garment reached US$28.1 billion, up 3.3% compared to 2015, accounting for 16% of the country’s export turnover.
Great competitive pressure
From 2010 to now, the proportion of export turnover of FDI enterprises has always remained at a high level. In 2016, FDI enterprises exported 16.6 billion USD, accounting for 57.7% of export turnover of the country. At the same time, according to statistics of the Vietnam Textile and Apparel Association, 30% of FDI enterprises are accounting for 70% of sales, while 70% of Vietnamese enterprises account for only 30% (about 7 billion USD).
The world market is increasingly volatile, 2016 is considered the most difficult year since 2008 for the export of Vietnam’s textile and garment industry.
The change in China’s policy from subsidizing cotton producers to reserve national cotton to selling national reserve cotton at low prices close to market prices made Chinese enterprises reduce their imports of Vietnamese yarn and buy cotton. domestic yarn production.
“It proves that other textile and garment producing countries are coming up with positive policies to reduce input costs for businesses, thereby improving competitiveness and attracting orders from Vietnam,” the Ministry of Industry and Trade said. determined.
Besides, countries have also begun to increase the use of trade remedies with Vietnam. According to statistics of the Ministry of Industry and Trade, from 2007 up to now, Vietnam’s export fiber products have been sued 7 cases, including 5 anti-dumping lawsuits, one anti-subsidy lawsuit and one application case. safeguard measures from Turkey, the EU, India and Brazil.
Currently, Vietnam is being imposed anti-dumping duty by Türkiye on polyester elastic fibers and synthetic man-made fibers; was investigated by India for anti-dumping on spandex yarn since January 2016.
Assessing the capacity of the textile industry, Ms. Do Kim Chi, Trade Research Institute, Ministry of Industry and Trade, said that Vietnam’s textile and garment market share, especially textiles, is still much smaller than China’s. – Vietnam’s main competitor in exporting textiles to other countries.
China accounts for 36.59% of the total textile exports and 38.63% of the world’s total apparel exports while the respective share of Vietnam is 1.59% and 4.49%. The main reason is due to the low competitiveness of Vietnamese textiles and garments compared to China in the world market.
Specifically, Ms. Chi analyzed, in terms of percentage of the world market, China ranked first while Vietnam ranked 14th. In terms of product diversity index (number of similar products), China ranked 5th while Vietnam ranked 38th. “Thus, the world’s largest textile and garment exporter has a much higher competitiveness than Vietnam”, commented Ms. Chi.
Passive on raw materials
In the context of increasing competitive pressure, the Vietnamese textile and garment industry has not yet escaped dependence on imported raw materials and accessories. The Ministry of Industry and Trade said that for cotton: Vietnam depends on 99% of imported cotton; in 2016 cotton imports reached 1.03 million tons, worth about 1.7 billion USD, up 2% in volume and 2.5% in value compared to 2015.
Regarding fiber, textile and garment imports reached 861,000 tons, worth 1.6 billion USD, up 8.8% in volume and 5.9% in value compared to 2015. Fabric imports in 2016 reached 10.5 billion USD, up 3.2% compared to 2015 and accounting for nearly 40% of Vietnam’s garment export value.
This shows that the supply chain of Vietnam’s textile and garment industry still has many shortcomings, along with the weakness in the production of raw materials and input materials, which has affected the development ability of Vietnam’s textile and garment industry. especially in the face of opportunities from free trade agreements.
Currently, Vietnam can only supply 0.3% of the demand for cotton, 40% of the demand for fiber, the rest must be imported from the United States, China and Taiwan. Yarn output reaches 1.4 million tons/year but more than 70% is for export; while importing nearly 0.1 million tons of high-index yarn from China, Korea, and Taiwan.
Weaving creates nearly 2.8 billion meters of fabric per year (accounting for 30% of demand), still has to import 6.1 billion meters of fabric from China, Korea, and Taiwan, countries not participating in the Agreements major free trade such as TPP, EVFTA, VJEPA (accounting for more than 70%).
Regarding garment accessories, there are now domestic production facilities for a number of main types of accessories such as: sewing thread, cotton sheets, sticky mex, plastic buttons, zippers, elastic bands, labels, packaging… but also can only meet part of the needs of the domestic market, the rest must still be imported.
Previously, according to a report by the Vietnam Textile and Apparel Association, Vietnam’s textile and garment industry is in the value-added segment.
