In recent years, the export pattern of the global textile and garment industry is undergoing great changes. In the context of the impact of the epidemic has not yet fully dissipated, supply chain instability and frequent geopolitical conflicts, the textile industry of traditional textile powers such as Bangladesh, Indonesia, the Philippines and Turkey is facing challenges, and exports have fallen sharply. At the same time, Vietnam has eaten this wave of dividends, and now the Vietnamese textile industry has become somewhat different from people's impressions. The rush of Chinese capital to Vietnam has attracted a large number of Chinese capital and enterprises to enter, and the foreign direct investment (FDI) in Vietnam reached a new high of 6.17 billion US dollars in the first quarter of 2024, an increase of 13.4% year-on-year, and the momentum is fierce. Among them, the most active is the influx of Chinese companies. Although according to the statistics of Vietnam's Ministry of Investment and Development, the Chinese mainland only ranks second among the newly registered capital of foreign direct investment in 2023 (US $3.544 billion, followed by Singapore's US $3.77 billion and Hong Kong's US $3.413 billion), many mainland Chinese investments are made through Singapore and Hong Kong, both in volume and in total. Chinese investment in Vietnam is undoubtedly at the top of the list. "As far as we know, more than 300 listed Chinese companies have set up production bases in Vietnam, and there are more than 3,000 listed Chinese manufacturing companies in total." Wang Li, founder of the first station in Vietnam, said. The reasons why Chinese companies are flocking to Vietnam are not complicated. The main factor is avoiding high tariffs. "Most industries export from China and Vietnam to the U.S. tariff difference of 20 to 25 percent." Industry insiders told Tiger Sniffing that some products even have double anti-tariffs (anti-dumping and countervailing duties) on China, such as candles exported from China to the United States with a tariff of more than 100%, but there is no export from Vietnam. Another reason is that compared with other popular low-tariff regions such as Mexico and Brazil, Vietnam's comprehensive cost is still relatively low. According to the report of the Vietnam Textile and Garment Association, Vietnam's textile and garment exports are expected to reach $23.64 billion in the first seven months of this year, an increase of 4.58% over the same period in 2023. Apparel imports are expected to reach $14.2 billion, up 14.85 percent.
Vietnam, with its relatively low labor costs, stable political environment and free trade agreements signed with major global economies, has attracted a large influx of foreign investment into its textile industry in recent years. The Vietnamese government has also actively promoted industrial upgrading and invested heavily in infrastructure construction, making Vietnam one of the important bases for global textile production. In addition, Vietnam also excelled in supply chain management, and its fast logistics and close supply chain relationship with China have enabled it to continue to increase its competitiveness in the global textile market. The increasing demand for Vietnamese textiles from developed countries such as the United States and the European Union is also one of the reasons for the steady growth of its exports. The Vietnamese textile industry has been known for its low labor costs, but with the rise in wages in recent years, this competitive advantage is gradually disappearing. According to the report of the Ministry of Industry and Trade, the average wage of textile and garment workers in Vietnam is $300 / month, higher than the world average of $200 / month. According to Miniumm, this wage is also three times higher than the wage of textile workers in Bangladesh ($95 / worker/month) and twice higher than the wage of textile workers in India ($145 / worker/month). This will partially reduce the competitiveness of Vietnamese textile and garment products compared with major textile and garment producers such as Bangladesh, Malaysia and Indonesia. If you include social security and overtime pay, Vietnamese workers earn about 3,000 yuan a month (including social security and two hours of overtime pay), while the average worker in the factory in Huizhou, China, earns about 3,800-4,000 yuan. For office workers with a certain degree or professional skills (white-collar workers), wages are higher, with a monthly salary of about 4,500 yuan, and the overall cost has been close to 70% of China's. Compared with China, the biggest advantage of Vietnamese workers is young, but even if the personnel are young, even if only one day a week, even if Vietnam is already a more efficient region in Southeast Asia, but according to industry sources, Vietnam's production efficiency is only about 70% of the domestic. The rise in labor costs has made international textile orders, especially those from small and medium-sized enterprises, which relied on cheap labor in Vietnam, reconsider the choice of production sites. But from the reason point of view, the rise in wages of Vietnamese workers, to some extent because of labor shortages, according to relevant reports, Vietnam's textile and garment industry is facing huge recruitment pressure, at present, the industry is short of 500,000 workers, especially skilled workers and management personnel.