Vietnam Textile Industry Issues Plan for 2020 and Beyond - Vietnam Briefing News
HANOI – Vietnam’s Ministry of Industry and Trade has recently ratified a textile and garment industry development plan for 2020, with a vision for 2030.
According to Deputy Minister Do Thang Hai, the plan will do much to boost the growth of the textile industry in Vietnam.
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The plan lays out a series of milestones to be reached:
With respect to localization rate within the industry, the government has set the goals of:
- 55 percent by 2015;
- 65 percent by 2020; and
- 70 percent by 2030.
The development plan also pushes for an annual production growth rate of 12 to 13 percent during the period 2013-2020.
Export goals have been set as follows:
- 10 to 11 percent annual growth in the 2013-2015 period;
- 19 to 21 percent annual growth for the 2016-2020 period;
- 25 to 28 percent annual growth for the 2021-2030 period; and
- Export turnover is predicted to reach US$40 billion during the 2020-2025 period – this will require 12 billion square meters of fabric and five million workers.
It is also predicted that the domestic market will see a growth rate of nine to 10 percent during the 2013-2015 period and 10-12 percent during the 2016-2020 period.
Additionally, firms which are engaged in labor-intensive textile and garment production will be relocated to rural areas, whereas those firms engaged in fashion production, and related services, will be located in urban areas.
Vietnam’s textile industry
Vietnam’s textile industry is playing an increasingly large role in the country’s economy – It produces products that are exported to over 50 countries around the world, with the U.S. as the largest importer of Vietnamese textile products.
According to Nguyen Van Tuan, deputy head of the Vietnam Cotton and Spinning Association, since 2007 the country’s textile exports have seen a growth rate of 15 to 17 percent per year.
Additionally, 13.6 percent of Vietnam’s total export value is made up of textiles and garments. The forthcoming implementation of free trade agreements (FTA), such as the Trans-Pacific Partnership and the Vietnam-EU FTA, are expected to boost this percentage of exports.
Once these FTAs are completed, many of Vietnam’s products will be able to take advantage of zero percent tariff rates in the U.S. and the EU – currently the average tax rates are 17.5 percent and 9.6 percent in these two markets, respectively.
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