![]() ![]() Vietnam’s bilateral and multilateral FTAs continue to provide Vietnamese manufacturers access to new markets, minimizing the effect of growing trade protectionism. Increased market access through free trade agreements (FTAs_ and technology are major growth drivers for the garment and textile industry. Growth factors – increased market access and low labor costs ![]() In 2019, Vietnam imported up to 89 percent of fabrics, of which, 55 percent were from China, 16 percent from South Korea, 12 percent from Taiwan, and 6 percent from Japan. Although Vietnam has a huge potential for cotton cultivation and production, the textile industry imports most of the cotton inputs. The US, Europe, Japan, and South Korea are the main export destinations of Vietnam’s textile and garments products. In 2019, CMT accounted for about 65 percent of total exports, while the more advanced business models, like Original Equipment Manufacturer (OEM) and Original Design Manufacturer (ODM) accounted for only 35 percent. Downstream sector of garment manufacturing accounts for around 70 percent of the total apparel and textile sector in Vietnam with Cut-Make-Trim (CMT) models being the main activities. Sub-sectors that produce fibers or fabric are mainly used for domestic consumption because of the low quality. Vietnam’s garment and textile industry consist of 3 sub-sectors: upstream sector (fiber production), midstream sector (fabric production and dyeing), and downstream sector (garment manufacturing). ![]() Major factors driving the growth of the market are low labor costs and growing textile exports to the EU, the US, Japan, and South Korea. Garment manufacturing accounts for the majority of businesses, at 70 percent. In 2019, Vietnam’s garment and textile industry earned US$39 billion from exports, a year-on-year increase of over 8.3 percent, according to the Vietnam General Statistics Office. In the past five years, the textile industry has continuously grown at an average rate of 17 percent annually. In 2019, the industry’s export value contributed to 16 percent of total GDP. The garment and textile industry is one of the key industries in Vietnam with the second-largest export turnover in the country. Despite rising challenges due to the COVID-19 pandemic, the industry is fast evolving to address its haunted growth, raising optimistic prospects for recovery.Major factors driving industry growth are growing textile exports derived from multilateral free trade agreements and low labor costs.Vietnam is among the top textile producing countries and apparel exporters in the world, emerging as an ideal alternative to China. ![]()
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