13461 Fri, 01/04/2008 - 3:42pm
By Nathan Weber
Among the nations most likely to emerge as tomorrow’s global textiles leaders, Vietnam may show the greatest promise. It has set itself a goal of exporting $10 billion in both apparel and non-apparel textiles to the world by the year 2010—a goal that doubles the amount in 2005.
To be sure, Vietnam remains a relatively small player, especially in non-apparel textiles. For the first three quarters of 2007, it shipped to these shores only $151 million, a speck compared with China’s $7.1 billion for the same period, and well below both India’s and Pakistan’s volumes.
But absolute dollar amounts provide only a partial picture of the global market ranking. Growth rates, a measure of how rapidly countries are moving up (or down), offer another, perhaps sharper picture. Thus, while China’s growth rate for the nine months was robust, at 12.6 percent when compared with the same period the year before, India’s was only 3.6 percent. And Pakistan’s growth rate in fact dropped 11.6 percent.
In other words, when measured not by absolute dollars, but by rate of growth for the past three quarters of the year, India falls to ninth place from second, and Pakistan plummets to 23rd.
By the same token, Hong Kong, Vietnam and Japan show growth rates that propel them in the opposite direction. Hong Kong, for example, which is 24th in absolute dollars regarding exports to the United States, leaps ahead of China to first place. Vietnam jumps from 20th to third, and Japan from 10th to fourth.
It may be too early to predict that any country with a high growth rate in the export of non-apparel textiles to the United States, or anywhere else, will eventually dominate the field. After all, a miniscule dollar value yesterday, when doubled, remains miniscule today, even though it has grown 100 percent.
Still, Vietnam’s surging growth merits close observation.
Nearly two decades ago, Vietnam’s exports of textiles to the United States were non-existent. The devastating war with this country, on the heels of a previous war with France, had been formally over for 14 years, but the tiny southeast Asian nation’s textiles industry, long known for quilts and embroidered garments handmade by tribal groups like the Hmong, still had not industrialized to the point where it was taken seriously in the international trade arena.
In fact, it wasn’t until 1994 that Vietnam’s first textiles shipments, both apparel and non-apparel, made their way to these shores. That year, exports of non-apparel textiles to the United States amounted to less than a half million dollars—a pittance by any measure, and especially when compared with China’s exports of the same commodity worth more than $1.3 billion.
Today, while China clearly dominates such exports to the United States (and elsewhere), and is likely to maintain that position for the foreseeable future, Vietnam is rapidly moving ahead. Its rate of growth in exporting non-apparel textiles here was 10.6 percent for the first three quarters of 2007, compared with the same period the previous year. According to U.S. government figures, that is not much below China’s rate of 12.6 percent. In fact, measured by this pace, Vietnam is now third, after Hong Kong and China, and well ahead of the growth rates for Japan, Italy, Bangladesh and all other exporting nations.
Nor does the country base its emergence solely as a supplier to the world’s largest market, the United States. Vietnam’s Ministry of Industry disclosed in 2006 that it hopes to export textiles to $10 billion by 2010, a revision that doubles the target it had set the year before, according to Textile Intelligence, an Indian service.
Today, Vietnam’s state-owned conglomerate, the National Textile and Garment Group, known as Vinatex, is the 10th-largest garment producer in the world, according to the National Council of Textile Organizations, a trade group in the United States.
None of this is to deny some real problems Vietnam faces in its efforts to strengthen the sector. Internally, these include “design capability and material supply,” according to Textile Intelligence. (Material supply refers to Vietnam’s need currently to import most raw materials.)
Externally, problems include potential protectionist sentiment in more developed nations, and, if China can serve as an example, competition from elsewhere in Asia, especially as its own labor force professionalizes and begins to demand higher wages. But these problems, current and potential, are hardly insurmountable.