Vietnam is a Southeast Asian country, with more than 96 million inhabitants (July 2017), being world’s 14th most populous country. Bordering the Gulf of Tonkin, Gulf of Thailand, and the South China Sea, as well as China, Laos, and Cambodia, vietnam lies in a lucrative geographical location from trade perspectives.
Country’s 61.79% of the population belongs to the age group of 15-54 years, making the median age of the country 30.5 years. Also, with 34.9% urbanization, 94.5% literacy (age 15 and over can read and write), and a stable political system, Vietnam is has become an attractive investment destination.
It is a densely populated developing country, transitioning from a rigid centrally planned economy to a more industrial and market-based economy. Country’s GDP was $201.3 billion in 2016, with 32.7% of it being an industrial contribution. Vietnam’s 2016 GDP growth was 6.2%, reflecting its strong domestic demand and manufacturing exports.
Vietnam joined the WTO in January 2007. It also concluded several Free Trade Agreements (FTAS) in 2015-16, including the Eu-vietnam Free Trade Agreement, the Korean Free Trade Agreement, and the Eurasian Economic Union Free Trade Agreement, as a part of its commitment towards country’s global economic integration. Vietnamese government also acknowledges the need for a second wave of economic reforms, including reforming state-owned-enterprises, reducing red tape and increasing business sector and financial sector transparency.
Vietnam owned 7% of the global apparel export trade in 2016. Vietnam’s major trade partners are USA, Japan, Korea, UK, and Germany. Vietnam imports its textiles majorly from China, Korea, USA, Japan and other Asian countries.
Vietnam a country with a population of 92 million people of which 52 million people are working. Almost 20 years back Vietnam had started its apparel production however they weren’t a significant contributor to the world supply until 2005. They are presently catering to 5.7% of the world requirement. Total Export of Textile and Apparel amounts to USD 31 billion of which apparel exports contributes to a tune of 80% which is US 25 bn.
Vietnam is exporting majorly to USA (45%), EU (17%), Japan (12%), South Korea (10%), China (3%), Hong Kong (1%),
• 700 export factories
• 2.5 million workers
• 80% of female workers
• Workers are engaged through contracts. Contracts usually are of three types, differing in their tenures
There are about 5000 apparel manufacturing factories comprising in Vietnam which consist of MSME, corporates, units with 100% FDI (20% of total units), state owned enterprise which are turned into private owned factories but still a significant stake is with the Government and about 12% of the countries apparel turnover is contributed by these enterprise which operates under the name VINATEX. Most of the FDI’S are from China, South Korea, India, Japan, Turkey and Taiwan. FDI has been received on account expectations on TPP and FTA with EU which seems a disappointment at this point of time as US refrained from negotiations and still negotiations are on with EU. They are also in the process of initiating talks with countries like Australia, New Zealand, and Canada on CEPA. 90% of the factories works on CMT (Cut, Make & Trim) base productions, the sourcing company’s source fabrics from China, Korea, India, Pakistan, Italy and Turkey.