Home / Knowledge / News / Textiles / Chinese T&C investments in ASEAN carry inherent risks
Chinese T&C investments in ASEAN carry inherent risks
08
Mar '10
The Free Trade Agreement (FTA) between China and the countries of the ASEAN came in to effect beginning from January 1, 2010. This measure has created zero duty facility for exports of various goods including textile and garments for both.

The establishment of the FTA has brought and can bring in the future, numerous benefits to the Chinese textile and clothing sector, but can also bring with it a number of risks, which still need to be carefully evaluated.

For example, the Vietnamese central bank has announced another VND devaluation by 3.4 percent on February 11, 2010, which is the second VND devaluation since November 2009 when it was devaluated by 5.4 percent.

VND depreciation on one hand weakens China's competitiveness of textile exports to Vietnam; but on the other hand, it also enhances Vietnam's product competition with China in developed markets like Europe and America.

Similarly, the current inflation rate in Vietnam has reached 7.1 percent in January 2010, while that of Thailand has touched 4.1 percent in January 2010. High inflation results in higher production costs and wages, leading to greater risks in investment.

Some ASEAN countries lack advantages of supporting facilities to textile industry chain, industrial intensity is lower, infrastructure remains to be improved. All these factors put together, can increase investment costs of China's textile enterprises.

Moreover, political and security risks in the ASEAN countries and aversion to the Chinese dominating the markets could also become important constraint factors for the future course of China's textile industry in the ASEAN region.

When China's textile enterprises embark on creating investment opportunities, they need to carefully study the economic and political situation in the country, in order to avoid mistakes in investment decisions.

Fibre2fashion News Desk

Must ReadView All

Courtesy: UPM Raflatac

Apparel/Garments | On 17th Jan 2017

New residue free textile label adhesive from UPM Raflatac

Producer of self adhesive label materials UPM Raflatac, has...

Courtesy: Authentic Brands Group

Apparel/Garments | On 17th Jan 2017

Teen retailer Aéropostale reopens 500 stores in US

Teen apparel retailer Aéropostale has reopened 500 stores in the US,...

Courtesy: Centric Software

Information Technology | On 17th Jan 2017

Centric releases version 6.0 of PLM solution

Centric Software, the leading PLM solution for fashion, retail,...

Interviews View All

Karan Suratwala
Key Textile Accessories Private Limited

Chinese imports are destroying the supply chain

Amrit Sethia
SOIE

‘The intimatewear category in India is slowly becoming trend-sensitive.’

Dinaz Madhukar
DLF Emporio and DLF Promenade

‘Each event and promotion is planned out keeping in mind the business of...

Ashok Desai
Bombay Textile Research Association

Bombay Textile Research Association (BTRA) is a leading name in textile...

Johan Berlin
InvestKonsult Sweden AB

Investkonsult Sweden AB has been buying and selling second-hand textile...

Eric Scholler
Groz-Beckert

The Indian market has huge potential in technical textiles, and by far,...

Rupa Sood and Sharan Apparao
Nayaab

Nayaab, an exhibition meant to celebrate Indian weaves, is in its second...

Sonam & Paras Modi
SVA

Sonam and Paras Modi's Sva Couture is synonymous with head-turning...

Ritu Kumar
Label Ritu Kumar

‘Classics will return’ "There are a lot of people wearing western clothes ...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH
January 2017

January 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


eNEWS
Insights
Subscribe today and get the latest News update in your mail box.
Advanced Search