If TPP Comes Into Force, Vietnam Will Take More Clothing Orders From China.

Recently, TPP successfully concluded negotiations in October 5th. Act as Labor-intensive industries One of the many people in the domestic textile and garment industry believes that the industry will be more or less affected if the future trans Pacific Partnership Agreement (TPP) is effective.

Wang Qian, an analyst at Shanghai international cotton trading center, said that if the TPP came into effect, considering the production cost and other issues, the order originally belonging to China will be transferred to a country like Vietnam. "Vietnam can win market share from China and other non TPP members."

In fact, with the increase of domestic comprehensive cost, China's Clothing export Business has been very difficult in recent years. Wang Qianjin told reporters that in the three regions of the United States, Europe and Japan, 50% of the garments made in China in 2010 and 2009 were processed in China, but the proportion of these years is decreasing. In Japan, for example, the clothing processing orders in 2010 were 80% in China, but in 2014, the proportion dropped to 65%.

The industry generally believes that TPP will stimulate further changes in the global textile and clothing trade. China's share of clothing market in the United States in 2010 was 39%, which has dropped by 37% in the mid 2014, while Vietnam's share in the US apparel market has climbed to more than 10%. "Vietnam's manufacturing costs are lower than China's, and the tax-free offer may provide 12%~32% tax cuts, which will have a huge impact." JuliaHughes, chairman of the American fashion industry association.

In fact, many powerful Chinese large textile and garment processing enterprises have already "prepared for the rainy day". Shenzhou International, one of China's largest garment exporters, is expanding its production area in Southeast Asia. The Ningbo company set up a ten thousand factory in Vietnam. The vertically integrated production mode enables it to sit on cheaper hydropower and labor costs, as well as local export tariff preferences, and strive for the transition time for the transformation and upgrading of the domestic production base.

Nevertheless, many people believe that under pressure, improving the technological content is the top priority of China's textile and garment processing enterprises. "The upgrading of labor costs and the competition in overseas markets seem to have put pressure on enterprises, but in fact they reflect the growth of China's middle class from the side. As the cost increases, the demand for high quality products is also increasing. " Shimon, managing director of Lida (China) Textile Instrument Co., Ltd. said, "in this environment, if a company can go through a higher automation and higher level," Cost effectiveness To meet the higher demand of customers, we can seize the opportunities. This will be a potential market for future enterprises.

In ran Shimon's view, the current predicament is temporary. It is a labor pains that must be experienced in the transition from simple pursuit of economic efficiency to quality efficiency and environmental protection under the new normal. The biggest challenge facing China's textile industry is actually not the extrusion of external market, but how to seize the opportunity and break through the self, that is, to enhance the competitiveness through improving the quality and efficiency of itself.