HomeNews60% of raw materials are imported from China, but Vietnam launched an investigation on textile raw materials to China! What happened?

60% of raw materials are imported from China, but Vietnam launched an investigation on textile raw materials to China! What happened?

2020-12-10

In recent years, Vietnam's textile industry has developed rapidly. In 2018, Vietnam has become the world's third largest textile export country after China and India. However, in 2019, although Vietnam's textile exports increased, they were only $39 billion, which failed to reach the target of $40 billion that year. This year, due to the impact of the epidemic, Vietnam's textile industry continues to face problems, and it is estimated that the annual target of US $42.5 billion will not be achieved. At this time, Vietnam, which relies on Chinese raw materials, made unexpected moves in textile raw materials to China.


Latest: 60% of Vietnam's textile raw materials relying on China launched an investigation. What's the situation?


According to the recent decision No. 1079 / qd-bct issued by the Ministry of industry and trade of Vietnam, Vietnam will launch an investigation into some polyester long fiber (also known as filament yarn) as textile raw materials from China, India, Indonesia and Malaysia. The survey was mainly initiated by Vietnam's leading player in the industry.


It is understood that although the industry leader accounts for 67.4% of Vietnam's total polyester long fiber output, it still competes with similar products from China, India and other countries. Therefore, the company hopes to reduce the competitive advantage from other markets such as China through investigation, and finally achieve the goal of developing in Vietnam.


Although Vietnam can produce 350000 tons of filament yarn every year, its domestic demand is only 270000 tons, which can fully meet the domestic demand. However, Vietnam's products do not have much competitive advantage in the country, Vietnam has long relied on imports of polyester long fiber, and even increased its dependence on foreign countries year by year. According to the data of General Administration of Customs of Vietnam, the import volume of such products gradually increased from 154000 tons in 2017 to 185000 tons in 2019, with the highest dependence on China.


According to Vietnam statistics, in 2019, China firmly occupies 60% of Vietnam's imported fabrics and 55% of the fiber market. The chairman of Vietnam textile and Garment Association (vitas) also revealed that Vietnam is very dependent on Chinese raw materials, saying that 55-60% of the raw and auxiliary materials of Vietnam's textile industry are supplied by China, especially the raw and auxiliary materials, yarn, cloth, etc. of clothing are mainly imported from China. Why is Vietnam investigating Chinese raw materials when Vietnam is so dependent on them?


Vietnam's textile industry has been suffering from continuous problems: in February, there was concern about the shortage of raw materials in China, and in March, there was concern about the chargeback in Europe and the United States


At this time, Vietnam launched the investigation of textile raw materials and auxiliary materials to China, mainly due to the continuous problems of the textile industry in Vietnam in recent months. Vietnam also hopes to take this opportunity to vigorously support its enterprises and reduce its dependence on raw materials from China and other countries, so as to avoid the dilemma in February.


In the previous February, when China delayed the resumption of work, Vietnam's textile industry was faced with a serious shortage of textile raw and auxiliary materials. At that time, the chairman of Vietnam textile and Garment Association (vitas) even said that if Vietnam's textile industry could not import raw and auxiliary materials from China and other places by the end of March, many companies would have to declare shutdown in April. However, with China's successful control of the epidemic and the rising rate of return to work, by the end of February, China had restored most of its raw material supply, which greatly relieved Vietnam's urgent need.


However, one wave is not flat, another wave is rising. In March, when supply was resumed in China, Vietnam finally didn't need to worry about the shortage of raw materials. Just as it was planning to speed up production, European and American enterprises, as the center of the global epidemic, came to Vietnam to refund their bills. According to the vice president of Vietnam textile and Garment Association (vitas), as the two largest markets for textile exports in Vietnam, customers from the European Union and the United States have repeatedly called back or delayed the payment.


Due to the sharply reduced demand from the two major markets in Europe and the United States, Vietnam is expected to reduce its exports to the European Union by 8% in the first and second quarters of 2020. Many Vietnamese textile companies began to plan to reduce production lines, reduce wages and work hours to reduce costs, to deal with the possible large-scale chargeback phenomenon.

kevin zhu

Mr. kevin zhu

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