Vietnam'S Textile And Garment Industry Is Developing Rapidly And The Four Advantages Are Showing.

The textile and garment industry is a pillar industry and an important livelihood industry in Vietnam. According to the data released by the Vietnam textile and Apparel Association, as of 2018, there were nearly 7000 textile and garment enterprises in Vietnam, with 2 million 800 thousand industrial workers, accounting for 25% of the total labor force in the Vietnamese industrial sector, and played an important role in maintaining local social stability. The textile and garment industry is also Vietnam's largest export sector, and is an important source of Vietnam's foreign exchange earnings and foreign trade surplus. In 2018, Vietnam's textile and clothing exports totaled 36 billion 200 million US dollars, and jumped from fourth place in global textile and clothing exports to third place, second only to China and India.

The main advantages of Vietnam's textile and garment industry are reflected in the following 4 aspects.

Abundant labor resources

At present, Vietnam is in the demographic dividend period, with a total population of about 93 million. It is mainly distributed in the Red River Delta centered in Hanoi and the southeastern region centered on Hu Zhiming, with great potential for development. Among them, the age of employment is about 50 million, the median age of the population is only 31 years old, and the population under 35 years old accounts for 55.6% of the total population. The labor participation rate of the Vietnamese population of the right age has remained stable, reaching more than 78% in recent years. The situation of women's labor force is more than that of men.

Good business environment

Vietnam's political environment is stable, and the Vietnamese Communist Party is its only legitimate political party. In 2016, the supreme leadership of Vietnam achieved a smooth handover of power. Its term of office will last until 2021, and the policy of reform and opening to the outside world will continue. The Vietnamese government's ability to maintain power and control of the political situation make Vietnam's political turmoil and terrorism less likely. In the world bank's business environment report 2019, Vietnam's business environment index ranked sixty-ninth among the 190 economies in the world.

Preferential tax policy

In order to attract foreign investment, the Vietnamese government has made huge concessions in terms of corporate income tax and land rent. According to Vietnamese tax laws, enterprises that invest in Vietnam can enjoy 10% preferential tax rates in 15 years and 17% preferential tax rates in 10 years according to different conditions. At the same time, for Vietnam's open park, some eligible enterprises can enjoy the "four exemption and nine halves" and "two exemption and four reduction" tax policy, which has played a huge role in promoting foreign investment in Vietnam's textile and garment industry.

Tariff advantage

At present, Vietnam has joined several free trade agreements, and its tariff advantages provide an opportunity for Vietnam to further integrate into the global value chain and production network. According to data from the international cooperation division of the Ministry of finance, as of December 22, 2019, there were 20 free trade agreements that Vietnam has participated in or is negotiating. Among them, there are 12 free trade agreements that have come into force and are being implemented, which will give preferential treatment to Vietnam's exports. At the same time, the Vietnamese government is actively promoting negotiations on other agreements, such as RCEP (ASEAN+6), Vietnam - Norway, Vietnam - Switzerland, Vietnam - Ireland. If the negotiations are successful, Vietnam's advantage in tariff will be more obvious.