When it comes to Vietnam, most people’s first thought is probably motorcycles. Why are there so many motorcycles in Vietnam? Because Vietnam has no light rail, no subway, no elevated highways, and even very few highways and railways running through the country. Therefore, some experts also call Vietnam’s development stage “50 kilometers per hour”.
But in recent years, Vietnam has been involved in various competitions, and there is a big phenomenon of “Motorcycles become Altos “The momentum. For example, on June 8 this year, Vietnam and the European Union signed a free trade agreement, which will eliminate or reduce 99% of tariffs.
As soon as this news came out, the response was very violent. The World Bank said that this agreement will bring 2.4% GDP growth to Vietnam’s economy in 2030. Will Vietnam become the world’s factory? Will it have a huge impact on China’s textile industry, or even replace China’s position?
Vietnam’s textile and clothing exports experienced explosive growth in June: An increase of about 40% month-on-month
In June 2020, Vietnam’s textile and clothing exports were US$2.602 billion, an increase of 39.37% month-on-month and a year-on-year decrease of 9.66%; exported yarn was 127,200 tons, A year-on-year increase of 0.24% and a month-on-month increase of 27.95%.
Although the new crown epidemic has had an impact on Vietnam’s textile and clothing exports in the short term, Vietnam’s textile and clothing industry has recovered significantly Relatively fast. First, the Vietnam-EU Free Trade Agreement (EVFTA) has been signed and approved at the end of June. After the agreement takes effect, the EU will immediately cancel about 85.6% of Vietnam’s import taxes, of which 77% of textile tariffs will be canceled on EU exports to Vietnam. 48.5% of tariffs will also be eliminated; 99% of tariffs on goods from both sides will be eliminated gradually within 10 years.
Although EVFTA also imposes restrictions on raw materials shortages for textiles and clothing and EVFTA’s rules of origin, it is still a “major benefit” to Vietnam. Second, competitors such as India have seen a severe spread of the domestic epidemic and low operating rates, making the overall industry recovery relatively slow.
Vietnam and the EU signed a free trade agreement, nearly 2,000 Chinese companies were affected
It took eight years After time went through the entire process of negotiation, signing and approval, the Vietnam-EU Free Trade Agreement (hereinafter referred to as the “Agreement”) finally came into effect on August 1, 2020.
Vietnam has thus become the first emerging market country among the Asia-Pacific countries to establish free trade relations with the EU. At the same time, it is also the second to establish free trade relations with the EU after Singapore. of ASEAN countries. Vietnamese companies will have the opportunity to enter the EU market with a population of 500 million, and Vietnamese consumers will also have the opportunity to obtain cheaper EU products and services.
After August 1, tariffs on 71% of Vietnam’s exports to the EU and 65% of EU exports to Vietnam will be immediately exempted. According to the agreement, about 99% of tariffs in bilateral trade in goods will be gradually reduced until eliminated.
Vietnamese economists have compared this free trade agreement to “a highway connecting Vietnam and the European Union.” Thanks in part to its free trade agreement with the EU, Vietnam has set an economic growth target of around 5% for 2020.
After the agreement comes into effect, both Chinese products and Chinese-funded enterprises in Vietnam will face major challenges. For example, in the EU market, Chinese products, especially labor-intensive products such as textiles and clothing, will face competition from Vietnamese products. In the Vietnamese market, Chinese mechanical and electrical products may face competition from EU products.
However, not all goods manufactured in Vietnam can enjoy zero tariffs. According to the EU principle of origin, the raw materials of exported products must originate in Vietnam, the EU or have been approved by the EU. other countries that have signed free trade agreements.
According to the person in charge of a Vietnamese garment enterprise, the fabric used in the production of enterprises is mainly imported from China and other countries, and Vietnam is very dependent on the supply of textile raw materials from China. According to Vietnamese statistics, last year, Chinese fabrics and fibers accounted for 60% and 55% of Vietnam’s imports respectively. To enjoy zero tariffs from the EU, companies cannot use imported fabrics, but there are only a handful of existing weaving, printing and dyeing companies in Vietnam.
In addition to the principle of origin, Vietnam’s goods exported to the EU may also face sustainable development, social responsibility, environment friendly and other non-tariff trade barriers. However, Nguyen Van Sin, chairman of the Vietnam Small and Medium Enterprises Association, said that these difficulties and challenges are also opportunities for Vietnamese enterprises to innovate and improve their management capabilities.
Huang Xingqiu said that there are at least 2,000 Chinese-funded enterprises in Vietnam. These enterprises need to carefully study the terms of the agreement, benchmark the quality requirements and technical requirements of EU products, and make good use of this opportunity to continue Expand export business to the EU.
At the same time, he also said that improving product quality will also help to enter Vietnam’s European countries duty-free.It is developing very fast, but trying to PK China is like trying to smash a car while riding in it, and you will only suffer the consequences. After all, Vietnam is essentially a natural extension of China’s industrial chain rather than a subversion.
On the other hand, it is impossible to become a powerful country by working. Any developed economy needs one or two companies that can generate large amounts of profits and are in their own hands. Big industry. This is true for South Korea’s memory chips, Taiwan’s chip foundry, Japan’s automobiles, and mainland China’s communications and electricity.
To win such a large industry, it often requires independent enterprises to cooperate with the government’s support, make one or two “betting on the national destiny” type of investment, and defeat the original opponents. accomplish.
However, in Vietnam, companies that dare to delve deeply into the technology industry have not yet emerged. The tight international environment has left fewer and fewer big industries for late-developing countries, and no tough battle has been fought. In the current Vietnam, there is a high probability that it can only rely on new and old loves to survive a golden period of rapid growth, and then hit the glass ceiling of the international division of labor.
In Vietnam, Dongguan is fine, but Shenzhen is not.
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