In the first eight months of the year, Vietnam’s export value of textiles, fiber, and cloth was up 8.6 per cent.Textile production and exports have grown over the same period last year.
However, domestic textile enterprises face many challenges in production and business activities. The US-China trade war has affected exchange rates, leading to higher prices of processed goods in Vietnam compared to regional competitors such as South Korea and China. That has also affected the number of export orders for local enterprises. Export orders have fallen. Some businesses have only received 70 per cent of new orders against the same period in 2018. Vietnam's major export market –China – has cut import volumes. Garment enterprises have also seen a drop in orders.
In 2018, many large enterprises in the industry had export orders throughout the year, while this year, they could only sign monthly export contracts with small volumes. Orders are broken up instead of bulk. As the third quarter comes to an end, it is unlikely that Vietnamese textile enterprises will increase exports due to the on-going US-China trade war. Enterprises from South Korea and Taiwan in Vietnam have gained advantages from the trade war because they own production factories under the value chain. Korean textile and apparel companies in Vietnam have been the biggest beneficiaries of the trade war.