Textile Industry: Can Vietnam And India Achieve Their Dreams?

Some entrepreneurs began to focus on Southeast Asia, where labor costs were much lower.

Nowadays, the enterprises that have set up factories in Southeast Asia have undergone a period of adaptation for a year or two. What is the difference between Chinese manufacturing and Southeast Asian manufacturing?

Made in Vietnam: in the name of fame, it is difficult.

Since 2000, Vietnam's manufacturing industry has developed rapidly with the rapid development of Vietnam's economy and the opening up of the country.

It is understood that Vietnam's manufacturing income accounted for 21% of GDP in 2005, and its output value increased at an annual rate of 11%.

Compared with China, Vietnam has a very cheap labor force, which directly reduces the production cost of garment factories.

In addition, as a member of ASEAN, manufacturing products enjoy a tariff advantage in the ASEAN region.

Finally, Vietnam has abundant oil resources and abundant oil resources, which provide material basis for the rapid development of manufacturing industry, and the conditions for setting up factories are unique.

In recent years, Vietnam's performance has not been satisfactory.

Beginning in 2008, Vietnam was affected by the economic crisis, currency devaluation and soaring prices, making manufacturing enterprises invested in Vietnam deeply disturbed by the unprecedented strike and cost pressures.

In the case of soaring prices, the strike began to spread throughout Vietnam, and unstable people also made the factory's efficiency decline.

A manager in Vietnam in Vietnam told reporters: "at that time, workers were always asking for strikes, which have become habitual actions."

In May of that year, 8000 workers in a company in Haiphong city continued to strike for a week, and the factory shut down and lost a lot.

Finally, each worker was raised by a salary of 150 yuan to calm down the storm. Even so, the company lost 2000 workers, and the same month, more than 600 workers were lost because of the strike.

It is understood that the company has turned to Thailand to explore the investment environment.

A family in Huzhou, Zhejiang

The head of the company went to Vietnam for a special inspection this year. He told reporters after returning to China: "although the labor cost of Vietnam is very low, I will not consider investing there in the near future."

According to his understanding, the cost of labor in Vietnam is 1200 yuan per person per month, and the cost of domestic labor is four times higher than that of Vietnam.

When Chinese workers have a stable job, they usually work hard and seldom come late or leave early.

In Vietnam, the weekly salary is also an unimaginable phenomenon at home: local workers do not save or manage their finances after a week's salary. Instead, they concentrate on playing games, spend their salaries, return to work in factories, and so on.

The quality of workers is not better than that of the domestic industry, so it is difficult to meet the needs of enterprises.

Xiao Zong, a Dongguan business leader, told reporters: "the cost of running factories in Vietnam is not low."

All this stems from the industry matching problem, which is easily reached by domestic upstream manufacturers. Vietnam often does not have these processes, which leads to import of some raw materials, freight and tariff.

Plus, Vietnamese workers can not replace the skilled workers also need to take from the past, which led to some high-end products manufacturing costs are not lower than the domestic.

So even though

Local enterprises are vigorously developing the manufacturing industry, and many enterprises are fighting off the idea of setting up factories in Vietnam and turning to India.

In order to develop India's economy, the India government has strongly supported manufacturing industries in recent years, and has built industrial parks throughout the country, hoping to grasp its demographic dividend. Foreign media said India also has a "Chinese dream".

At present, India ranks sixtieth in the global competitiveness list, far lower than China, which stems from India's long-term economic prosperity.

Can India make use of the demographic dividend to realize the rapid development of the country?

The answer is very difficult.

In 2012, India's artificial minimum reached 250 yuan per month, which is undoubtedly good news for clothing enterprises, but low price means the productivity below.

According to the official census in India, the illiteracy rate in India is as high as 36%. In Bihar, more than 53% of them fail to read, and the standard of literacy is whether they can write any word beyond their names.

There are about 800 million farmers in India. It is difficult for these people to get away from the old agricultural production mode. Even in big cities, they are unable to meet the requirements of modern large-scale industries. After entering the big cities, these farmers often work in such areas as cleanliness, security and so on, which do not require professional skills.

Even a part of the India workers who are competent for the garment factory have little overtime and a large number of festivals, which makes it difficult for factories to deal with urgent orders in India.

In recent years, there has been an endless stream of labor conflicts arising from wage and vacation benefits. Most foreign companies can only relax themselves in order to restore production.

Compared with domestic factories, the India factory does not seem so worried.

In July this year, the HSBC report showed that India's manufacturing PMI increased from 51.5 last month to 53, a 17 month high. This means that with the strong support of the India government, India's manufacturing industry is expanding at a high speed.

This may indicate that the quality of employees in India will also gradually improve.