Can The Tariff Advantage Of Southeast Asia Shake The Status Of China'S Top Garment Exporting Country?

Globalization of the world economy is the globalization of world economic integration, not the globalization of world economic interests.

WITS data show that in 2018, the total import and export of textiles and clothing products in the world amounted to US $691 billion 900 million, of which the top five suppliers were China (30.6%), Bangladesh (6%), Vietnam (5.6%), India (4.8%) and Italy (4.6%). In 2018, the United States, Japan, Europe and Central Asia imported textiles and garments from China, accounting for 35%, 58% and 21% of their global imports respectively.

Due to the perfect industrial chain and complete categories of products, China is still the largest export country of textiles and clothing. Benefiting from the advantages of production costs, preferential external trade agreements, and input from other countries in industrial technology and management, Southeast Asian countries such as Bangladesh and Vietnam are gradually entering the ranks of textile and garment exporters.

Vietnam and Kampuchea's export tariff advantages to EU and Japan

1 Vietnam has signed several FTA in recent years, and is expected to come into force with the European Union FTA at 2020.

Since the implementation of the policy of economic internationalization in 1986, Vietnam has signed 13 bilateral and multilateral free trade area agreements (12 effective, 1 not yet effective), and 3 agreements are still under negotiation. The agreement countries under the FTA can give each other more preferential treatment than other parties who give other WTO members on the basis of MFN treatment. Under FTA, zero tariff is generally practiced among economies, and tariff preferences achieved by Vietnam and the European Union, Japan and other regions provide protection for the establishment of export competitive advantage. 2009-2018, Vietnam has signed FTA with Japan, Korea, Eurasian Economic Alliance and other countries and regions, and has entered into force. Among them, Japan signed the FTA in 2015, and promised to reduce the 94% tariff rate to zero within 10 years. Eurasian Economic Alliance has enjoyed preferential tariff reductions in the 90% export products of Vietnam in the 2016 signed FTA, and the 59% export products tariff has dropped to zero. In 2015, Vietnam signed the EVFTA with the European Union and is expected to take effect in 2020. The agreement between the two sides will cancel more than 99% tariffs and partially cancel the remaining tariffs through a limited zero tariff quota, that is, tariff quota (TRQs). After the agreement comes into effect, the EU will cancel the tariff of 65% of the goods imported from Vietnam within 7 years, and the rest will be phased out within 10 years. Take textile and clothing products as an example, silk ladies clothing (HS number 62114910) is included in category a products, and the product duty rate will be zero on the date of the effective date of the agreement. Other chemical fiber bras (HS number 62121010) are listed in category B5 products, with a current tax rate of 20%. On the date of the effective date of the agreement, the export tax rate will decrease in 6 years and fall to zero in sixth years. On the whole, the EU has a transitional period of 5 to 7 years for products with high sensitivity to textiles and clothing, and 0-3 years for the less sensitive products. Among them, the transition period of footwear products is the longest.

2 Kampuchea and EU EBA or revocation, zero tariff preferences are challenged

According to China's Ministry of commerce information, Kampuchea's exports account for about 60% of the total export volume of Kampuchea every year from the US's GSP and EU tariff preferences (EBA: EU's imports from the least developed countries, all products other than weapons, are not exempt from quotas). The 7 effective FTA in Kampuchea is crucial to its export market. 3 at present: Vietnam and Kampuchea still have obvious tariff advantages.

Through the above data, we find that China, Vietnam and Kampuchea are exporting apparel products to the United States, Europe and Japan, whether they are exported to the world or exported to the United States, Europe and Japan. Comparing the tax rates between the three exports to the United States, the European Union and Japan, we can see that Vietnam and Kampuchea have obvious tariff advantages compared with China.

China's position is stable.

The advantage of China's textile industry is that its industrial chain is complete and its upstream and downstream supporting facilities are comprehensive. In recent years, the main advantages of garment manufacturing countries are artificial and manufacturing costs, as well as preferential income tax, plus the input of industrial technology and management from other countries, including Southeast Asian countries such as Bangladesh and Vietnam, which are gradually entering the ranks of major exporters of textiles and clothing. 1 export perspective: Southeast Asia's dependence on orders in the US, Europe and Japan is much higher than that in China.

By analyzing the export structure of textiles and clothing in China, Vietnam and Kampuchea, we found that the latter two accounted for significantly higher exports to the United States, Japan and Europe than China's corresponding export share, indicating that the two were more dependent on orders in the three countries and regions. (since the latest data in Kampuchea in WITS were up to 2016, the year was selected for comparison).

China: in 2016, the total export of textiles and garments in the world totaled 253 billion 300 million US dollars, and the top five overseas exporting countries and regions were the United States (17%), Japan (8%), Vietnam (5%), Britain (4%), Germany (3%).

Vietnam: in 2016, the total export of textiles and garments in the world totaled 28 billion 700 million US dollars, and the top five exporting countries were the United States (42%), Japan (11%), South Korea (10%), China (9%) and Germany (3%).

Kampuchea: in 2016, the total export of textiles and garments was US $6 billion 800 million, and the top five exporting countries were the United States (25%), the United Kingdom (11%), Germany (10%), Japan (9%) and Canada (8%).

The proportion of China's exports to the United States has not exceeded 20%, while the proportion of Kampuchea's exports to the United States has reached 25%, and Vietnam's exports to the United States have reached 42%. The proportion of China and Vietnam exported to Europe is relatively low, but the total proportion of Kampuchea's exports to the United Kingdom + Germany has reached 21%, indicating that Kampuchea has high export dependence on EU powers. Vietnam and Kampuchea have stronger export dependence on China, Europe and the United States than Japan. First, Vietnam and Kampuchea have a higher proportion of garments and garments exports than China. In 2016 Vietnam exported the United States, Japan and the world accounted for 82%, 97% and 81% of clothing and clothing exports respectively, and 2016 of Kampuchea's clothing exports accounted for 96%, 97% and 95% respectively. In 2018, China's clothing exports accounted for 83%, 82% and 66% respectively. We find that China has a higher proportion of global textile raw material exports, making it less dependent on orders from the US and Japan. Two: Vietnam and Kampuchea are more dependent on imports of raw materials: Vietnam, for example, relies mainly on imports. USDA data show that 2011-2018 of Vietnam's cotton imports account for more than 80% of its total supply. 2 import perspective: China remains the core supplier of Europe and America.

By analyzing the import and export structure of textiles and garments in the United States, Japan and Europe, the leading position of China's first largest exporter of textile products is remarkable. Although some low-cost Southeast Asian countries have undertaken some domestic manufacturing orders in recent years, China has a significant industrial advantage with comprehensive consideration of workers' capabilities, factory stability and the integrity and maturity of the industrial chain. It will remain the preferred destination for exporting countries. The United States: in 2018, the United States imported $119 billion 500 million of global textile and apparel, and the top 5 importing countries were China (35%), Vietnam (11%), India (7%), Bangladesh (5%) and Mexico (5%).

Japan: in 2018, Japan imported $37 billion 700 million of global textiles and clothing, the top 5 importing countries were China (58%), Vietnam (13%), Indonesia (4%), Bangladesh (3%), and Kampuchea (3%).

Europe and Central Asia: in 2018, Europe and Central Asia imported $324 billion 800 million in global textiles and clothing, and the top 5 importing countries were China (21%), Bangladesh (9%), Germany (8%), Turkey (7%) and Italy (7%).