VietNamNet Bridge – Vietnam’s textile & garment industry is reaping the benefits from the China-US trade war, reported Bizlive.
A report found that textile & garment export turnover increased steadily in the last five months, reaching a record high of $3.16 billion in August.
Textiles and garments are now the second biggest export, next to phones, making up 20 percent of the total export turnover in the first eight months of the year. The figure was 12.2 percent only in 2017.
The textile & garment export value reached $19.76 billion in the first eight months of the year, increasing by 16.9 percent, or $2.86 billion, compared with the same period last year.
The US remains the biggest export market for Vietnam’s textiles and garments which consumed $9.11 billion worth of products during that time, increasing by 11.9 percent over the same period last year and amounting to 46.1 percent of Vietnam’s textile & garment export turnover.
Textile & garment companies all have reported satisfactory growth rates for the first six months of the year. Hoa Tho Textile & Garment (HTG) reported a 329 percent growth rate.
The companies which gained growth rates of over 70 percent included Soi The Ky JSC (STK) and Song Hong Garment (MSH). Meanwhile, Vinatex, TNG Investment & Trade (TNG) and Damsan reported growth rates of over 50 percent.
Other companies including Thanh Cong Textile & Garment, Investment (TCM) and Trade JSC and Gilimex (GIL) also had satisfactory business results.
The prosperity of textile & garment companies has helped increase their share prices. By August 31, TNG price had increased by 24 percent from the low in July, while GIL price had risen by 30 percent and TCM 40 percent.
On September 18, after the news about the US imposition of 10 percent tax on $200 billion worth of Chinese products was released, the shares of garment companies continued to soar in price. TNG, for example, saw the price hitting the ceiling level of VND14,000 per share.
Bao Viet Securities (BVSC), in its latest report, predicted that the US-China trade war would bring opportunities to Vietnam’s textile & garment industry.
With Vietnam’s textile and garment exports bearing tax rates of 8-10 percent in the US market, BVSC believes that the industry is receiving the biggest benefits from the trade war. There are two reasons.
First, the Chinese yuan has depreciated sharply against the US dollar, and has also depreciated against the Vietnam dong. This allows Vietnam’s garment companies to import materials from China at lower prices. Second, Vietnamese enterprises have opportunities to gain more in the US market thanks to the more competitive prices.