VietNamNet
Bridge – A new wave of foreign
investments in spinning, weaving and dyeing sectors has been kicked off, since
investors can see the profits they can gain from the Trans-Pacific Partnership
Agreement (TPP), according to the Vietnam Cotton and Spinning Association
(VCSA).
Foreign
investors are considering pouring money into the textile and dyeing projects,
while keeping a close watch over the TPP negotiation process.
In
fact, experts have warned about the challenges Vietnam has to face when
negotiating the issues relating to the textile and garment sector. Especially,
the US side may put forward the principle of product origin, which is believed
to put big difficulties for Vietnam.
Nevertheless,
experts say that if the involved parties can harmonize their benefits through negotiations,
TPP agreement would bring big opportunities to many Vietnamese sectors which
Vietnam has big advantages. Especially, big opportunities would be opened in
the spinning, weaving and dyeing: TPP would not only help boost exports, tax
reductions, but also create a firm driving force for the investment and
development.
Nguyen
Son, Deputy Chair of VCSA, said TPP would give the reason for the enterprises
in the sectors to increase the productivity. At the meetings with VCSA’s
representatives, some Chinese enterprises revealed that they were considering
the possibility of expanding business or making new investment projects in the
spinning industry.
Investors
still can see great potentials in the sectors in the economic crisis period,
which explains why more foreign direct investment (FDI) projects have still
been granted licenses recently.
Kyung
Bang Vietnam, a 100 percent South Korean invested enterprise, has spent 40
million dollars to implement the first phase of the project on the spinning
factory with the capacity of 6000 tons per annum in the Bau Bang Industrial Zone
in Binh Duong province.
Some
other investors are following necessary formalities to be able to start the
construction of their factories in Vietnam. One of them is Hong Kong’s Texhong
Company which would build a spinning factory with the estimated investment
capital of 300 million dollars in the Hai Yen Industrial Zone in Quang Ninh
province.
The
Vietnam Textile and Garment Group (Vinatex) has also joined forces with
Japanese Itochu to set up a joint venture to run a 50,000 spindle factory,
capitalized at 120 million dollars in the Bao Minh Industrial Zone in Nam Dinh
City. It is expected that the project would kick off by the end of the year.
Virginia
Foote, Chair of the US-Vietnam Trade Council USVTC, said Vietnam should take
initiative to attract FDI into the textiles instead of sitting and waiting for
South Korean, Japan and China to join TPP to ensure the principle of product
origin.
The big
textile factories are mostly located in South Korea, Taiwan, China and Japan.
Therefore, in the immediate time, Vietnam needs to increase the export turnover
in order to persuade the investors in South Korea, China and Taiwan to relocate
their factories to Vietnam.
A
research work of Professor Peter A.Petri from the US Brandeis University showed
that when joining TPP, smaller economies such as Chile, Peru and Vietnam would
see the biggest income growth rates. Vietnam may see the GDP reaching 235
billion dollars by 2025. Meanwhile, garments and textiles may bring the export
turnover of 28.5 billion dollars by 2025.
How the
Vietnamese textile and garment industry can benefit from TPP would still depend
on the negotiation results. However, Ngo Chung Khanh, a senior official of the
Ministry of Industry and Trade, said that Vietnamese enterprises need to take
initiative to build up the strategies to access the TPP-member markets right
now.
Source:
TBKTSG
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