Vietnam’s textile and garment exports increased by six per cent in the first half of 2016. Exports to US went up by 5.9 per cent while those to Japan saw an increase of 2.9 per cent. Exports to South Korea were 15.58 per cent higher. Yet the mood among exporters is not upbeat. There has been lack of orders since the beginning of the year, triggering stiff competition among domestic manufacturers for customers. Some firms have seen a 30 per cent drop in the number of orders in the first five months of 2016, which can be attributed to a falling demand in import markets. Also export prices have plunged by 10 to 15 per cent.

Brexit and preferential trade regimes of US and EU with rivals such as Myanmar, Laos and Cambodia are among the reasons for foreign clients to turn towards countries with reduced import duties and more tariff advantages. Also, the Trans-Pacific Partnership and the Vietnam-EU free trade agreement, from which Vietnam exporters can benefit, have not yet come into effect.

Meanwhile, Vietnam plans to develop large textile and garment industrial zones to attract FDI in dyeing, and fabric and yarn production for making high-end products.