Vietnam Becomes World’s Fourth Largest Textile Exporter

Posted by Reading Time: 4 minutes

By Edward Barbour-Lacey

According to the Vietnam National Textile and Garment Group (Vinatex), Vietnam has become the world’s fourth largest textile exporter. In the first half of this year, the country earned an estimated US$10.26 billion from exporting these products – a year on year (YOY) increase of 10.26 percent, though the industry may fall short of its 2015 export target of US$27-27.5 billion.

Professional Service_CB icons_2015RELATED: Dezan Shira & Associates’ Global Services

The three largest importers of Vietnamese products were:

  • United States – with a YOY growth rate of 11.01 percent
  • South Korea – with a YOY growth rate of 8.33 percent
  • European Union – with a YOY growth rate of 8.2 percent

Free trade agreements have been a key part of this impressive trade growth. In December of last year, Vietnam signed a bilateral trade deal with South Korea. The deal cuts tariffs on a range of products traded between the two countries and is predicted to almost triple bilateral trade to US$70 billion by 2020. Also in the same month, Vietnam signed an FTA with the Eurasian Customs Union. This FTA covers such areas as trade, customs facilitation, intellectual property, investment, rules of origin, and the lifting of legal and technical barriers to trade.

Additionally, Vietnam is also currently in negotiations for two more trade agreements, one with the US, and one with the EU. Once finished, the EU-Vietnam FTA is expected to cover such areas as investment, environment, competition, and sustainable development, as well as reducing tariffs. Vietnam is also part of the US-led negotiations on the Trans-Pacific Partnership (TPP), a massive trade deal that will result in significantly reduced tariffs for all of the signatory countries. Upon completion, the TPP trade area would comprise a region with US$28 trillion in economic output, making up around 39 percent of the world’s total output. 

Related Link Icon-VBRELATED: With TPA in Hand the U.S. Seeks to Push Vietnam to Reduce Reliance on Chinese Fabric

Not just a one-trick pony

Despite the country’s success in the textile industry, Vietnam is keen to expand other business areas and reduce its reliance on one main industry. The country is also eager to move away from simply assembling products to more value-added types of activities in order to keep income levels rising in the country.

If the country fails to expand its economic focus, it risks falling into the dreadedmiddle income trap”, an economic situation where a country is able to achieve a certain level of income but finds it impossible to move beyond that amount.  Economic growth in the country stagnates as a result.

According to official government development plans, certain industries will be prioritized in the future, these include the processing and manufacturing industries, the electronics and telecommunications industries, as well as the new energy and renewable energy industries.

Professional Service_CB icons_2015RELATED: Dezan Shira & Associates’ Pre-Investment Strategy Advisory

In addition, Vietnam is also seeking to improve its general business environment in order to make the country more attractive to foreign investors. Chief among these changes, the government is removing over 3,000 legal requirements for businesses through amendments to the country’s Law on Business and Law on Investment. Other changes include the modernization of payment systems; for example, it is now possible to use e-payment for such things as import and export duties.


Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email or visit

Stay up to date with the latest business and investment trends in Asia by subscribing to our complimentary update service featuring news, commentary and regulatory insight.

Related Reading Icon-VB

Import and Export: A Guide to Trade in Vietnam
In this issue of Vietnam Briefing Magazine, we provide you with a clear understanding of the current business trends related to trade in Vietnam, as well as explaining how to set up your trading business in the country. We also attempt to give perspective on what will be Vietnam’s place in the Association of Southeast Asian Nations (ASEAN) in 2015, and look at some of the country’s key import and export regulations.

Using Vietnam’s Free Trade & Double Tax Agreements
In this issue of Vietnam Briefing we explore how Vietnam’s Free Trade Agreements – and especially those via its membership in ASEAN – will affect foreign investment into Vietnam. We also go a step further and examine the specific, bilateral Double Tax Agreements that Vietnam has enacted, and how these can be further used to minimize profits and withholding taxes that would otherwise be levied upon foreign investors.

Developing Your Sourcing Strategy for Vietnam In this issue of Vietnam Briefing Magazine, we outline the various sourcing models available for foreign investors – representative offices, service companies and trading companies – and discuss how to decide which structure best suits the sourcing needs of your business.