The US-China trade conflict is seen as an opportunity for the domestic textile industry as the US has been tending to shift its textile orders from China to Vietnam.
Opportunity to penetrate the US market
In the first few months of 2018, before the tense trade between China and the United States soaring, many opposing opinions were made to domestic garment enterprises. One side said that risks of exchange rate fluctuation, orders, protectionism ... will negatively affect the domestic textile and garment industry; others said the shift of goods flow from China to Vietnam is still the bright spot in the context above.
Garment production line at Chutex Company. Photo: Xuan Thi
In Binh Duong province, in the first nine months of 2018, textile and garment export turnover was estimated at USD1,886.6 million, up 15.5% year on year, accounting for 10.8% of the province's total export turnover. The growth rate of this kind of enterprises in the province in the key export markets such as the United States, the European Union, Korea, China, Japan ... all positive growth. In particular, as the US-China trade war intensified, the number of orders moving into Vietnam increased.
According to experts, the impact of the US-China trade war on Vietnam's economy is very small, not much impact on Vietnam's exports to the US. According to the Binh Duong Textile Association, Vietnam's textile and garment industry is well positioned in the textile and garment industry. Over the past years, Vietnamese textile and garment enterprises have come in the direction of making the items difficult. In addition, Vietnam has experience in converting the model from OEM to FOB (self-contained), ODM (self-designed). Up to now, the percentage of purely domestic textile and garment enterprises is only 30-35%, FOB 55-60%, ODM nearly 10%.
However, besides opportunities, the trade war between the United States and China also poses a major challenge for the domestic textile and garment industry. Therefore, in order to reach the target of more than 10% growth in 2018, the textile and garment industry in the country should make great efforts and have a proper strategy in the future.
Promote investment in new technology
At Magic Show - Sourcing at Magic 2018, Nevada State, USA, Binh Duong Province participated in 4 garment stalls. According to the provincial Trade Promotion Center, the customers visiting the general booth of the province have strongly affected the garment enterprises in Binh Duong. Here, the customers highly appreciate the ability to meet the requirements of products of enterprises in Binh Duong. Sample products are carefully studied and appreciated by the customers about the garment technology and the quality of their products.
At this fair, American buyers are demanding products such as fabrics, the ability to deliver orders as well as payment, delivery issues ... for garment enterprises in Binh Duong. . In particular, some customers after the information on the first day of the fair sent an email asking Binh Duong company to quote, asking for information about the product. Some customers return to Binh Duong's booth to ask for some sample orders and to open long-term orders with large quantity of product units per month.
Phan Le Diem Trang, Vice Chairman of the Textile and Apparel Association of Binh Duong Province, highly appreciated the possibility of expanding the market of textile and garment enterprises in the province after participating in the fair in the US. She hopes that in the 2019 fair, the province will continue to support garment enterprises to join the larger and more professional general stall to create a dynamic, professional and prestigious image of Binh Duong textile and garment industry. In the eyes of US businesses in particular and the world in general.
According to economic experts, the benefits of the domestic textile industry will be moderate and gradual, as multinationals made in China are still attractive, especially for high end products. For Viet Nam, the textile and apparel development strategy must be closely linked to the industrial revolution 4.0. On the domestic textile and garment side, intensive investment should be made to automate step by step the production system to increase labor productivity in order to reduce the proportion of labor cost per product. This is also a great place to increase income for employees. At present, Vietnamese enterprises are only strong in textiles and garments, not strong in fashion design, branding, distribution, so they will have to compete a lot.
Reported by Tieu My – Translated by Vi Bao
