'Vietnam sources 50% of textile raw material from China'

30 Oct '13

2 min read

China supplies about 50 percent of all textile raw materials sourced by Vietnam, speakers said at a seminar on ‘New trade agreements and its impact on Vietnam textile sector’, held in HCM City, last week, the Vietnam National Textile and Garment Group (Vinatex) said on its website.

Cotton, fibres, fabrics, buttons, sewing materials, etc. are the main raw materials imported by Vietnamese companies engaged in manufacturing of garments for exports.

Except for cotton, which is imported from Australia, India and the US, most of the raw materials and accessories are imported from China, the speakers at the seminar said.

They said the sourcing of raw material is a critical issue for the development of enterprises engaged in manufacturing, and generally the amount of raw material imports in a year is always higher than the quantity imported the previous year.

According to Vietnam Cotton Association (VCOSA), China now plays a huge role in controlling the supply of raw materials for the textile industry worldwide.

At present, China accounts for 27 percent of global cotton supply, 60.42 percent of fibre supply, 50.6 percent of fabric supply, and 48 percent of spindles, VCOSA representative said at the seminar.

Vo Tri Thanh, deputy director of research at the Central Institute of Economic Management (CIEM), said several small and medium-sized enterprises in Vietnam went bankrupt in 2012, many of them because of over-dependence on China.

The amount of intermediate imported goods is too large, and the survival of small and medium enterprises depends heavily on the import of goods from China, Thanh added.

The competitiveness of Vietnamese industries that support the garment manufacturing and export sector is very weak, and hence the Vietnamese clothing sector is heavily dependent on the Chinese market, both for intermediate and final consumer goods, Thanh said.

China was the leading supplier of fabric to Vietnam in January-July 2013 period, and Vietnam’s fabric imports from China grew by 26.45 percent year-on-year to US$ 2.1 billion, according to Vietnam customs statistics. In comparison, Vietnam’s total fabric imports during the seven-month period rose by 18.97 percent year-on-year to US$ 4.7 billion.

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