Vietnam Shield Depreciation Is Opportunity? Chinese Textile Enterprises Want To Buy Hu Zhiming

After ten years of rapid economic growth, Vietnam's financial crisis finally broke out, and its consequences directly led to a number of Chinese enterprises investing in Vietnam to start layoffs and reduce business.

Fortunately, the impact of the financial crisis on Chinese textile enterprises is not large.

Moreover, because of the accelerated depreciation of the Dong shield, Chinese textile enterprises may also make profits in exporting clothing to Europe and the United States.

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In June 12th, He Changshun, vice president of the Chinese Chamber of Commerce, told the Securities Daily reporter: "the financial crisis in Vietnam has little impact on China's textile enterprises. As textile products are mainly exported to Europe and the United States in Vietnam, and they pay the US dollar, most of the enterprises in Vietnam are waiting to see that there are no funds to return home."

Sun Huaibin, director of China Textile Research Center, pointed out that at present, China has invested more than 200 textile and garment enterprises in Vietnam, and textile and accessories enterprises are also entering the Vietnamese market one after another.

For Vietnam's current economic difficulties, experts believe that this is only temporary. Domestic textile enterprises should not lose confidence in investing in Vietnam.

At present, Chinese enterprises in Vietnam should resolve the pressure by developing new products, increasing the added value of products and raising the prices of products.

At the same time, enterprises can diversify their investment risks through internal trade pactions in the domestic parent companies.

As for the current difficulties faced by Chinese textile enterprises invested in Vietnam, sun Huaibin said: "do not easily use the way of divestment. I think more should be taken into account, for example, to raise labor productivity through improving management, so as to reduce cost pressures."

The financial crisis in Vietnam caused the property prices of Hu Zhiming in Vietnam to drop by 50%, while Hanoi also dropped by 20%. But the reporter learned from the Chinese Chamber of commerce that although the financial crisis in Vietnam is very serious, it has little influence on China's textile enterprises in Vietnam.

According to a textile enterprise investing in Vietnam, "the reason why spinning enterprises are affected by the financial crisis is small because they are small and medium sized enterprises. Unlike some home appliance enterprises, their scale of production is much larger."

On the other hand, textile enterprises are mostly fixed customers in Europe and America. Most of them are export oriented. They usually do not make Vietnam's domestic market, and their products are mostly processed.

The settlement currency is changed from US dollars to RMB.

As Vietnam's factories are mostly exporting, their settlement is mainly settled in US dollars, and most of them will be converted into Renminbi, thus resolving the negative impact of the devaluation of the Vietnamese shield.

However, if China's textile enterprises want to survive through Vietnam, the financial crisis will not do without strength.

In June 11th, the editor in chief of China's first textile network, Wang Qian, explained to the Securities Daily that the financial crisis in Vietnam has advantages and disadvantages to the textile enterprises invested by Vietnam in China. It mainly depends on the capital. Because of the financial crisis, the financial market in Vietnam is not stable nowadays. It is not easy for Chinese textile enterprises to lend to local banks in Vietnam. This requires that Chinese textile enterprises invested in Vietnam have huge financial support in China, and only in this way can they overcome the difficulties.

Wang Qianjin believes that at present, the textile enterprises that have invested in Vietnam have already had a certain foundation in Vietnam, so long as they can solve the problem of capital flow, they will not have much impact, but for those enterprises that are preparing to invest in Vietnam, it will be dangerous.

With the continued sharp depreciation and drastic inflation of the currency, Vietnam's comparative advantage of low labor cost has been greatly reduced. Some Chinese textile enterprises that originally wanted to pfer the industry to Vietnam began to hesitate to invest in Vietnam or to run factories in other countries except Vietnam.

Ding Li, director of the scientific research division of the Guangdong Academy of Social Sciences, pointed out that "many labour intensive industries in the Pearl River Delta, such as garment factories, especially the Hong Kong funded Taiwan funded enterprises, regard Vietnam as an ideal place for industrial pfer. Now they may suspend their pace."

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RMB appreciation, raw material prices, tax policy changes, rising labor costs, the introduction of the new labor contract law, new environmental regulations and rising logistics costs caused by the rise in oil prices, many factors have long been unable to pressure the profits of Chinese textile enterprises, and forced some textile enterprises to shift their attention to more advantageous prices of Vietnam, India, Thailand and other countries and regions.

Textile enterprises are very difficult to survive in China. Most enterprises have the intention to move to some places with low cost. Vietnam has been the preferred market.

"The cost of labor there is only 50-60 dollars per month, almost less than our 1/3 here."

Said the head of a textile enterprise.

It is understood that many enterprises are preparing to build factories in Vietnam because Vietnam's textile and garment industry is relatively mature, labor-intensive and low cost.

Wang Qian analysis, Vietnam's financial crisis on textile enterprises will not be too great.

The main feature of Vietnam's textile economy is the cheap labor force, but the raw material is not large. The textile industry chain is relatively weak. Vietnam's textile machinery and equipment, raw materials and garment accessories are mainly imported from China, Japan and South Korea. Therefore, some of the cost is relatively rigid, and the total cost of exports will not drop substantially, so we should not worry too much about this.

Under the continuous and sharp depreciation of currency and heavy inflation, Vietnam's manpower cost is no longer as low as before, and it also makes some Chinese textile enterprises bosses stop to wait and see.

However, the so-called "wealth and risk" demands, although the Vietnamese financial crisis has brought huge losses to some Chinese enterprises, there are still some Chinese textile enterprises intending to bet on the Vietnamese market.

It is reported that originally planned to lead a delegation to Vietnam to investigate investment in July 1st? Script src=>