Vietnam Textile Industry Must Turn To Invest Upstream Industry

According to Vietnam's investment report August 9th, the textile industry as Vietnam's second largest export industry, and the two digit growth, has attracted a large number of investors, but its upstream industries such as weaving and dyeing and finishing industry are difficult to get investment due to concerns about environmental pollution. This leads to the current imbalance in Vietnam's textile industry and the lack of cloth distribution, which leads to the restricted development of the industry and the low added value of production. In 2018, Vietnam's textile exports amounted to about US $36 billion 200 million, but imports of raw materials and accessories amounted to US $23 billion 600 million, of which about 12 billion 800 million US dollars were imported, 5 billion 470 million US dollars for textile accessories, 3 billion US dollars for cotton and 2 billion 419 million US dollars for textile yarns. In the first 7 months of 2019, Vietnam imported about 7 billion 765 million US dollars of cloth, an increase of 4.5% over the same period last year, of which nearly 4 billion US dollars were imported from China, an increase of 10%, about 1 billion US dollars from South Korea, and about 977 million US dollars from Taiwan, China. It is expected that cloth imports will continue to grow, and imports of cloth will be estimated at US $14 billion for the whole year, an increase of US $1 billion 200 million over 2018.

Reported that, due to the lack of dyeing and finishing links, Vietnam's textile yarn 2/3 must be exported. EVFTA requires that textile "cloth is produced locally" and the rules of origin required by CPTPP that "textile yarns are produced locally" will certainly promote Vietnam's textile industry to turn to invest in these upstream industries.

According to the Vietnam Textile Association (VITAS), in the past few years, some projects devoted to the production of cloth materials have been rejected by local governments. For example, the TAL group of Hongkong, China, put forward a 350 million yuan dyeing cloth project in the 2 phase of Yongfu Pingchuan beashan Industrial Zone, which was rejected by the local government. Dyeing cloth links do have the risk of polluting the environment, but if the project is put into the wastewater treatment process, it should be approved.

In response, the general office of the government has issued a document to the Ministry of industry and trade, pointing out that the premier of the government requested the Ministry of industry and trade to coordinate with all localities to solve this industry problem.