Vietnam'S Textile Exports Meet New Challenges, Masks Plummeted By 34%

At the beginning of the outbreak, Vietnam, the world's third-largest textile exporter, said it had enough capacity to become a "world's large-scale mask manufacturer" due to the global shortage of anti epidemic materials. According to the data of Vietnam's manufacturers, the production capacity of Vietnam's masks is about 800 million per month. Thanks to the strong demand from overseas markets, Vietnam's textile industry also ushered in a ray of vitality in the first half of this year. However, as the epidemic situation stabilized, Vietnam ushered in new problems.

It is reported that after entering the summer, the export of medical masks in Vietnam began to slow down due to the effective control of the epidemic situation in many countries. According to Vietnamese customs data, in July this year, there were more than 62 enterprises exporting various kinds of masks, with a cumulative export of 150 million, a decrease of 34.8% month on month. So far, in the first seven months of this year, Vietnamese enterprises have exported more than 711 million masks, mainly to the United States, Europe, Singapore, South Korea, etc.

Although the advantages of Vietnam's textile industry can not be ignored, there is still a certain gap between Vietnam's becoming a "world's large-scale mask manufacturer". For example, as the world's largest producer of masks, due to the clear and complete industrial chain and high maturity of the mask industry, China's largest production capacity was 20 million masks per day before the epidemic, and last year's annual production of masks exceeded 5 billion, accounting for 50% of the world's supply.

Not to mention, during the epidemic period, Chinese enterprises worked overtime and went all out to produce masks. By the end of February 2020, the daily output of masks in China reached 110 million and 116 million. According to this calculation, China's monthly production of masks can reach 3.5 billion, obviously lagging behind Vietnam's "production capacity of about 200 million per month".

In other words, the current weak production capacity is not a top priority for Vietnam's textile industry. The biggest challenge facing Vietnam's export-oriented economy is the tight consumption in the global market and the oversupply of textiles, including masks. According to the Ministry of industry and commerce, Vietnam's textile exports fell by 21% in July this year.

However, challenges and opportunities coexist. As of August 1, 2020, the Vietnam Europe free trade agreement will come into effect. According to the agreement, the additional cost of about 99% goods in Vietnam Europe bilateral trade in goods will be gradually reduced or even cancelled. Among them, the first tier immediately cancels the product subject of charges, involving textiles.

As a matter of fact, Vietnam Europe textile cooperation has always been an important part of both sides. In 2019, Vietnam's export to the EU has increased from US $2.8 billion in 2000 to US $41.54 billion, of which more than US $5 billion is clothing exports, accounting for more than 10% of the total exports. Let alone, the conclusion of the Vietnam Europe free trade agreement, which is compared to the "highway connecting Vietnam and the European Union", has brought more opportunities for Vietnamese textile enterprises to explore overseas markets.

According to Vietnam's goal, Vietnam's textile export will reach 42.5 billion US dollars (about 294 billion yuan RMB) by 2020. Under the halo of the Vietnam EU FTA, this goal seems to be expected to be achieved.

However, it can not be ignored that Vietnam's textile industry is highly dependent on the supply of production materials from China. Up to 60% of the raw and auxiliary materials of the country's textile industry come from China, especially the clothing raw materials, yarn, cloth and so on. It is pointed out that without the blessing of Chinese raw materials, the Vietnamese made products are just nominal.