The global epidemic of the epidemic has caused countries around the world to close down their countries, foreign trade has been suspended, and news of order cancellations abounds. As a newly emerging textile and apparel country, Vietnam’s dream of being the world’s factory is almost shattered!
Europe and the United States have stopped imports one after another, and the textile industry has begun to consider laying off workers
Vietnam has always hoped to become the new world factory. In recent years, it has continuously strengthened its ties with Western countries and has indeed received a large number of orders from the United States and the European Union, mainly in textiles. However, due to the recent raging of the new virus in Europe and the United States, countries that are highly dependent on the U.S. economy, including Vietnam, are experiencing very serious difficulties.
In fact, the connection between Vietnam and the United States is not just about manufacturing clothing for American companies, but also reflected in its dependence on the U.S. dollar. Vietnam is very dependent on U.S. dollar debt, and the U.S. economy has suffered a blow, and Vietnam cannot stay out of it. European and American customers have officially informed Vietnam that they will suspend accepting goods from Vietnam for at least three weeks. The details will depend on the subsequent development of the new virus. Analysts believe that Vietnam will be unable to export textiles to European and American countries for at least a month. In addition, even orders that are being transported on the road have been rejected by Europe and the United States, and the other parties are likely to not provide transportation subsidies.
Vietnam is very anxious. You must know that nearly half of the country’s textiles are exported to the United States every year, and about 18% are exported to Europe. The abandonment of major markets has caused Vietnam to lose nearly two-thirds of its textile sales recently. . Even if the virus situation in Europe is alleviated, people’s first choice for large-scale purchases will be daily necessities and medical supplies, not textiles represented by clothing. Therefore, many Vietnamese are very pessimistic about the development prospects in 2020. Because demand has decreased, many companies in Vietnam are even considering temporarily laying off some workers.
The new crown epidemic may cause half of Vietnam’s textile companies to go bankrupt
Some importers from the United States and the European Union, the main markets for Vietnam’s textile and clothing industry, have stopped orders for three to four weeks due to the impact of the new coronavirus pandemic.
Vietnamese textile and apparel companies are facing growing difficulties, from shortages of raw materials to falling demand in some export markets, which could lead to the bankruptcy of half of the industry.
Than Duc Viet, general manager of Vietnam’s leading textile manufacturer, said the U.S. market accounts for 40% to 45% of the company’s exports, followed by the EU at 33% to 40%.
However, the company is facing severe consequences as many US and EU importers have halted orders for Vietnamese textile and apparel products for three to four weeks due to the coronavirus pandemic, not to mention the current lack of It’s a question of inputting production materials.
In addition to supporting policies such as lowering interest rates and rescheduling debt repayments, Vietnam has proposed that the government subsidize part of worker wages for companies operating in labor-intensive industries such as clothing and footwear.
Phi Ngoc Trinh, general manager of Ho Guom Garment Company, said many orders have been cancelled, while some are facing delivery delays due to export difficulties.
Trinh said the company is still looking for a solution. Vietnam’s main export market for textile and apparel products is struggling amid the coronavirus pandemic, leading to lower demand.
Nguyen Dinh Lap, deputy general manager of Truong Phuc Hung Yen Company, echoed Trinh’s view, saying the sudden interruption in exports to the US and EU markets has left local businesses in trouble.
Lap added that the company will scale down operations until the coronavirus pandemic is over, but will still be required to pay employees 70% of their normal wages. If the coronavirus pandemic continues for a longer period of time, businesses may have to cease operations or even face bankruptcy.
In the short term, the dream of becoming a world factory will be difficult to achieve
It should be pointed out that, like India, Vietnam’s outstanding high-growth economic data in recent years are actually caused by the accumulation of large amounts of US dollar debt. In order to protect itself, the United States decided to ask the Federal Reserve to release water and start unlimited money printing. The foreign exchange reserves reached 83 billion US dollars. Vietnam was seriously injured. In a sense, the United States has sacrificed the interests of Vietnam and other countries. Therefore, Vietnam’s manufacturing is being intercepted by the United States and Vietnam, which lacks independent development, cannot protect its own development for the time being. The economy may face recession or even return to its original shape. This is not possible in the short term. To realize the country’s dream of becoming the world’s factory.
my country’s textile and clothing exports will be further impacted
According to China Customs data, my country’s cumulative export volume of textiles and clothing in 2019 was US$280.7 billion, a year-on-year decrease of 1.5%. From the perspective of market structure, exports to emerging markets perform better than traditional markets. In 2019, my country’s exports of textiles and clothing to countries and regions along the “Belt and Road” increased by 3.7% year-on-year. However, rigid demand is limited, and it will take time for the share to continue to grow. In a short time It is difficult to replace the status of the three traditional export markets of the United States, the European Union, and Japan in China’s apparel export field. China’s three major traditional export markets of textiles and apparel account for more than 40% of China’s total exports. In 2019, exports to the United States, Japan and…The export value of the alliance decreased by 6.6%, 4.6% and 4.4% respectively year-on-year. This will mean that my country’s textile and apparel industry will be affected even more due to the superposition of Sino-US trade risks and this public health incident.
Therefore, we will face the test of a more complex environment in 2020. In addition, during the public health incident in China, the United States tried to raise the threshold for U.S. market access. This will put China’s textile and apparel exports under pressure, and when competing for the U.S. market, it will face competition from other developing countries that can enjoy government subsidies. The textile and clothing industry chain is accelerating its shift to Southeast Asia, Eastern Europe, and Africa. In the next step, the United States may launch a targeted trade investigation to further suppress the competitiveness of relevant Chinese products in the U.S. market.
Impact on my country’s import and export in 2020
Comprehensive analysis shows that the 2020 public health incident will still have an impact on the Chinese textile market. On the one hand, the pace of resumption of work in various downstream fields is slow due to this, and factories need to digest inventory. Whether it is its own import demand or the impact of overseas public health events, my country’s chemical fiber imports will decline, especially in areas with severe public health events such as Japan, South Korea, and the United States.
In addition, due to the impact of public health events, China’s chemical fiber market will not only face weakening domestic demand in 2020, but also face major challenges in exports. As early as February, shipping companies have successively introduced alternative plans, canceled a small number of Asian voyages, and temporarily suspended operations or closed certain businesses. In addition, after various countries have implemented entry controls and strengthened docking restrictions on Chinese ships, there has also been a rise in tariffs. In addition, Indonesia, Jordan, and Russia have suspended the import of some Chinese goods, and Vietnam has issued a reminder to suspend customs clearance of goods. This means that China’s exports of chemical fiber, textiles and clothing to Southeast Asia, Europe and the United States will be significantly reduced, especially the export volume of textiles and clothing will be significantly reduced in a short period of time. Among chemical fiber products, the impact of polyester chips, polyester filament, polyester staple fiber, etc., which account for a relatively high proportion of export volume, is relatively obvious. As foreign trade is squeezed and some demand may shift to other regions, my country’s domestic demand may face a period of fierce competition.
</p
