Vietnam's textile industry hit by US-China trade war21/10/2019
Vietnam’s textile industry is facing many difficulties due to the prolonged China-US trade war, witnessing a fall in both export and production, say industry experts. Buyers are seeing fewer and smaller orders because of the conflict, said a ministry of investment and planning report. Export of raw materials to China plummeted as China cut back on imports.
China has been traditionally a major market for Vietnamese products and accounts up to 60 per cent of the country’s total export volume.
A performance review of the Vietnam National Textile and Garment Group (VINATEX), one of the largest in the country also indicated the same trend. Among the most affected was yarn export with the price continuing to fall.
“As the global yarn industry faces worsening prospects due to the on-going trade war, competition among rival countries such as India, Indonesia, Pakistan, Thailand and Vi?t Nam has intensified,” said the review.
In stark contrast to last year when there were more than enough orders to work on until the end of the year by September, companies are scrambling to secure orders to maintain production, according to a report in a top Vietnamese newspaper.
A vast majority of orders, if they were signed at all, were of small volume and short-term as customers were constantly on the look-out for new developments of the trade war. In addition, more and more Chinese orders have been shipped to countries with better tax incentives like Cambodia and Bangladesh.
The possibility of Vi?t Nam’s textile industry hitting its target of $40 billion in exports this year is getting slimmer, said VINATEX vice president Truong Van Cam.
Along with the trade war’s adverse effects, expectations for trade deals such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA) were set unrealistically high, Cam said, adding such deals will take a while to make a real impact.
Source: Fibre2Fashion News Desk