China Business News Network Since the beginning of this year, Vietnam's export trade has beenbooming, especially in the textile and apparel industry. The chairman of the Vietnam Textile and Apparel Association recently stated that in the first twomonths, Vietnam exported nearly 8.2 billion US dollars worth of textile andclothing products, a year-on-year increase of 59%. In just one year, Vietnam's textile and apparel exports have increased by 50% year-on-year, which isimpressive. The boom of Vietnam's textile and apparel exports is inseparablefrom the cooperation between China's textile fabrics, raw materials industryand Vietnam's textile industry, especially since the "Regional Comprehensive Economic Partnership" (RCEP) has been implemented since thebeginning of this year, the policy has been continuously released. and tradedividends, bringing "real money" benefits to enterprises andconsumers in the region. The mutually beneficial and mutually beneficialcoordinated development of China-Vietnam textile trade is an example.
The chairman ofthe Vietnam Textile and Apparel Association said that in the first quarter, theindustry is expected to earn 12.7 billion to 12.8 billion US dollars in exportrevenue. According to statistics from the General Administration of Vietnam Customs, Vietnam’s exports to the United States reached US$9.76 billion in March, and total exports in the first quarter reached US$25.96 billion. It isworth mentioning that the export of textiles to the United States reached 4.36 billion US dollars, a year-on-year increase of 24.2%, accounting for 50.3% ofthe total export of such commodities. It is understood that orders from many localtextile enterprises in Vietnam have even been placed in the third quarter ofthis year.
The strong recovery of Vietnam's textile and apparel exports is due to the clothing demandin the European and American markets and the increase in China's investment in Vietnam's textile industry; the second is due to the rapid vaccination ofdomestic vaccines in Vietnam and the relaxation of new crown pneumonia epidemic prevention and control measures. The entry into force of RCEP at thebeginning of this year and the preferential tariffs brought by the EU-VietnamFree Trade Agreement and the UK-Vietnam Free Trade Agreement have enabled Vietnamese textile and garment enterprises to increase their efforts to enter the European market this year. These factors have played a key role in therecovery of Vietnam's textile and garment industry.
According todata, Vietnam's textile industry is highly dependent on Chinese fabrics, with 60% of fabrics imported from China. Among them, in 2021, China's textile yarnexports to Vietnam will increase by 37%, and chemical fibers will increase by 36%. The deep cooperation between China and Vietnam in the textile industry isparticularly evident in China's Qingdao Guihua Knitting Co., Ltd. According to Li Yuqin, director of the company's sales department, "We learned from thepreferential scheme designed by the customs that according to the RCEP rules oforigin accumulation, Chinese-origin fabrics used in Vietnamese processingplants can be considered as party ingredients. We use China's domesticself-made fabrics. Knitted garments processed from fabrics meet therequirements of the RCEP agreement on rules of origin, and can continue toenjoy zero-tariff treatment in Japan with the RCEP certificate of origin issuedby Vietnam. China Qingdao Guihua Knitting Co., Ltd. has invested in the construction of knitted garment processing plants in Vietnam and other Southeast Asian countries in order to reduce production costs and enjoy thepreferential tariffs granted by Japan to ASEAN member countries. The productsare mainly sold to RCEP member markets such as Japan. According to estimates, thanks to the tariff reduction policy brought by RCEP, only Qingdao Guihua Knitting Co., Ltd. can increase the production capacity of fabrics exported to ASEAN by 21.66 million yuan each year due to the adjustment of the industrial chain and supply chain, and drive other upstream and downstream industries develop.
Moreover, theimplementation of RCEP has also enabled Chinese textile enterprises to see theprospect of stable development of related industries in the RCEP region. China Lu Thai Textile Co., Ltd. recently disclosed that its wholly-owned subsidiary Vientiane Textile has planned a total investment of about 210 million USdollars in Tay Ninh Province, Vietnam for the construction of a production basefor woven and knitted fabric products. After the investment is completed, theachievable production capacity is The annual output is about 60 million metersof high-grade woven fabrics. It can be seen from Lu Thai's announcement thatthis investment is based on the company's strategic development and the needsof foreign investment, efficiently integrating China's domestic and foreignadvantageous resources, and deciding to further invest in RCEP and areas alongthe Belt and Road. This decision effectively avoids the impact of potentialtrade barriers and maximizes the interests of the group.
Vu Chi Thanh, former deputy director of the Vietnam Central Academy of Economic Management, said that the effective implementation of RCEP has given Vietnam a long-term, stable and predictable export market. Vietnam's exports will have moreopportunities to enjoy preferential tariffs, and the export categories thatbenefit mainly include communications, textiles and footwear, agriculture andautomobiles. Nguyen Thi Thu Trang, director of the WTO and Integration Centerof the Vietnam Chamber of Commerce and Industry (VCCI), believes that RCEP hasopened up a free trade and investment zone for Vietnam that accounts for 30% ofglobal GDP and 30% of the global market. The establishment will provide more opportunities for trade and investment cooperation between Vietnam and member economies and create favorable conditions for Vietnamese enterprises toparticipate more widely and deeply in value chains in the region.