Will the rapidly rising Vietnam be the savior or rival of China's textile and garment industry?

Release time:

2019-02-19

China has been the world's "manufacturing factory" for many years, especially in the manufacturing and export scale of daily necessities and household appliances, such as textiles, clothing, bags, footwear and so on.

But now, with the adjustment of China's industrial structure, especially the continuous promotion of the strategy of "vacating cages for birds" in coastal provinces, many traditional labor-intensive manufacturing industries will either move to inland provinces with lower labor costs or move overseas. Among them, Vietnam, a neighboring country in Southeast Asia, has become a very popular destination for relocation.

According to a report by the Communist Party of Vietnam Electronic News on December 26, 2018: Li Jinchang, general manager of Vietnam Textile and Apparel Group, said at a press conference that Vietnam's textile and apparel exports in 2018 reached US $3.6 billion billion, a year-on-year increase of 16%.

The figure shows that Vietnam has become the world's third largest exporter of textiles and clothing, after China and India.

Sun Weiding, chairman of Huafu Fashion (002042,SZ), a listed company in the small and medium-sized board of the-share market known for its steady and prudent investment, also declared: Vietnam is the "Belt and Road Bridgehead" that Chinese textile and garment enterprises have to lay out. To become bigger and stronger, we must take two paths: one is to take advantage of China's 1.4 billion population and upgrade the industry in the process of closely following consumption upgrade. The other is "going out" to lay out the global market ".

Recently, Huafu Fashion announced that it will spend 2.5 billion yuan to build a new yarn project with an annual production capacity of 500000 ingots in Long 'an Province of Vietnam, which is the first phase of the company's planned new yarn project with an annual production capacity of 1 million ingots.

As for the source of funds for this investment to raise 2.5 billion yuan, Sun Weiting said that it can be considered to raise from the Vietnamese company's own funds and overseas financing methods, and does not rule out domestic equity financing and other methods.

In view of the financing liabilities of private enterprises, which are generally concerned by the market, the shares of listed companies held by Huafu Holdings are not pledged, and the debt ratio of listed companies and groups is maintained at a healthy level of 50%-60% in the manufacturing industry.

In many of my country's economic work conferences in the second half of last year, it was emphasized that "the manufacturing industry must develop with high quality" and "the deep integration of advanced manufacturing and modern service industries". It is expected that there will be more and more traditional manufacturing industries that rely on low labor costs to obtain price competitive advantages, and will have to face the need to improve the level of technological added value through scientific and technological research and development, and move inward (to the inland provinces of central and western my country) Or move out (Southeast Asia, Central America, Africa and other regions with lower labor costs) to reduce production costs, or even close the business.