Summary: “Foreign customers canceled their big Christmas orders in October, worth more than 100 million yuan, because they found our ‘spare tires’ in Vietnam.” Boss Chang reluctantly told reporters that this order accounted for the company’s business 40% of the total.
“Foreign customers canceled their big Christmas orders in October, worth more than 100 million yuan, because they found our ‘spare tire’ in Vietnam.”
Boss Chang reluctantly told reporters that this order accounted for 40% of Chang’s company’s total business volume, and he finally obtained it from Indian manufacturers in 2017.
Boss Chang’s company is a leading company in local clothing production. Boss Chang has been working in the garment foreign trade industry for 23 years. Currently, he has more than 2,000 employees in the factory, and there are also downstream supporting companies with nearly 1,000 workers following him.
“Our overseas customers are mainly large supermarkets in the United States, Canada, and Australia, so the total plate is just that big. It’s either yours or mine.” Boss Chang has been quite worried recently.
In fact, this is just a microcosm of the outflow of a large number of domestic and foreign trade orders to the Southeast Asian market in recent years: currently they are facing many practical difficulties such as supply chain obstructions and various types of costs continuing to rise.
Expert: Order transfer is an “illusion”
Zhao Weiguo, chief economist of Jin Securities, wrote: Recently, there has been an “illusion” of order transfers in the market, and it is not uncommon to believe that Vietnam and others are “stealing” China’s export orders.
In recent years, China’s export share has declined and Vietnam’s export share has increased, reflecting the relocation of labor-intensive textile manufacturing such as clothing, but its reliance on China’s raw material imports is high. Larger-scale electromechanical products have a similar logic. Vietnam is engaged in assembly and low-end parts production, and a large proportion of raw materials come from China. While Vietnam’s share has increased, China’s share has not declined.
It may be more of an “illusion” for ASEAN to steal orders from China. The structural highlights of the two major economies under the division of labor and cooperation in exports deserve attention. As global demand shrinks, a decline in export trade activities is inevitable; however, with high labor, energy and other costs, China and ASEAN’s division of labor and cooperation in the industrial chain may help to obtain more orders in global trade, allowing the two major economies to The export of some intermediate goods and capital goods with obvious complementary relationships is resilient. In addition, China also has certain advantages in exporting some midstream and upstream products with high energy consumption due to its energy cost advantage.
Of course, the expert also cited many cases, which will not be cited here. Anyway, both pros and cons have their own reasons. what you think?
Vietnam’s economy rebounds strongly
Exports of shoes and clothing increased by 23.5%
Vietnamese media reported that in the first five months of 2022, Vietnam’s textile and apparel exports totaled US$18.7 billion, a year-on-year increase of 23.5%. The situation is gratifying, but companies are also facing two major risk factors: unpredictable market dynamics and rising raw and auxiliary material prices. .
Duan Van Dong, director of the Organization Department of Nam Dinh Textile Joint Stock Company (Natexco), said that the company’s revenue in the first five months of this year was 1.023 trillion VND, which has completed the half-year plan, an increase of 123% over the same period last year. The company’s orders are currently fully booked until the end of September, or even the end of the year.
Du Feijue, deputy general manager of Viet Thang Corporation, said that in the first quarter of 2022, the company’s revenue has reached 25% of the annual plan and completed 35% of the annual planned profit.
Le Tien Truong, chairman of Vietnam Textile Group (Vinatex), said that in the first quarter of 2022, operating efficiency increased by nearly 75% year-on-year, and total revenue increased by nearly 50% year-on-year. However, the company also faced supply disruptions and raw materials caused by geopolitical factors. Risks such as soaring prices and transportation costs do not allow us to relax at all.
Since the beginning of this year, Vietnam has attracted a lot of attention with its excellent trade performance. According to the Vietnam News Agency, data from the General Administration of Statistics of Vietnam show that foreign direct investment in Vietnam increased by 7.8% year-on-year in the first five months of 2022, the highest level in five years.
According to a recent report by “Voice of Vietnam”: In the past period of time in Vietnam, despite the complex world economic situation, Vietnam’s gross domestic product (GDP) has still achieved good growth, its main economic indicators have been guaranteed, and its business environment index has increased by 12 percentage points. , the highest level since the fourth epidemic.
International organizations predict that Vietnam’s GDP growth this year will be between 5.3% and 6.5%, lower than the level before the outbreak of the new coronavirus pandemic. However, the international business community is confident in the future performance of Vietnam’s economy in global value chains.
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