Nâng cao năng lực cạnh tranh của ngành dệt Việt Nam trong bối cảnh tham gia Hiệp định đối tác xuyên Thái Bình Dương (2)

VIETNAM ACADEMY OF SOCIAL SCIENCES
ACADEMY OF SOCIAL SCIENCES

NGUYEN HONG CHINH

IMPROVING THE COMPETITIVENESS OF VIETNAM’S
TEXTILE AND GARMENT SECTOR IN THE
CONTEXT OF PARTICIPATING THE TRANS-PACIFIC
PARTNERSHIP AGREEMENT

Specialization

:Economic Management

Code

: 62.34.04.10

ECONOMIC DOCTORAL THESIS SUMMARY

HA NOI – 2017


The work was completed at:
Academy of Social Sciences

Science instructor:
Associate Professor Hoang Van Bang

Objection 1: Associate Professor Le Cong Hoa
Objection 2: Associate Professor Nguyen Trong Xuan

Objection 3: Associate Professor Nguyen Th Nguyet

The thesis will be defended before the Board meeting of doctoral
thesis at the Institute of Social Sciences. Time ...... day ...... month ...
2017

\

Thesis can be found at:
- National Library
- Library of the Academy of Social Sciences


1
HEADING
1.Urgency of research topics
Textile and garment sector is an advantage branch of Vietnam. Through 30 years
of innovation development, this sector has seen rapid development. By the year 2015,
textile ang garment sector exports have reached more than $ 27 billion, contributing
more than 10% of GDP and over 15% of total national exports, creating jobs for more
than 2.5 employees in more than 6,000 enterprises. But the competitiveness of our
country textile and garment sector still has many shortcomings, limitations such as low
labor productivity; the status of "bottlenecks" in the dyeing stage will directly impact
the competitiveness of the sector; localization rate of just over 50%; the added value of
the sector is low due to the method stages of processing garment exports is primarily
(65% CMT, FOB FOB I and II 25%, ODM and OBM only 9% 1%); Lack of highquality human resources; link clusters of textile industry is blurry.
In the context of deeper globalization and international integration, joinning the
free trade agreement (FTA) new, especially the new generation FTA creates many
opportunities and challenges. Vietnam is the only "textile powerhouse" Asia's joins the
TPP that can be regarded as an opportunity for the textile industry. To take advantage

of these opportunities and overcome challenges, require urgent now is to improve the
competitiveness of manufacturing industries, including the textile and garment
industry ... Aware of this problem, the authors have selected select the topic
"Improving the competitiveness of Vietnam’s textile and garment sector in the
context of participating the trans-Pacific partnership Agreement", as the subject
of my doctoral thesis.
2. The purpose and mission of the thesis research
2.1. Research purposes
- General Purpose: To clarify the rationale of competitiveness textile and
garment sector; the challenges of TPP opportunities for Vietnam's textile and garment
sector; development situation and the competitiveness of the this industry of Vietnam;
recommended viewpoints, orientations and measures to develop and improve the
competitiveness of Vietnam's textile and garment sector in the context of participating
TPP.
- Specific purpose: To make the final common purpose above thesis focused
answer four research questions are:
The first, What factors are affecting the competitiveness of textile and garment
sector in the context of participating the TPP ?.


2
The second, what are the criteria that be used to evaluate the competiveness of
this sector?
The third, how is the present state of Vietnam's textile and garment sector
competitiveness in the context of participating the TPP ?.
The fourth, what we should do to improve the competitiveness Vietnam's textile
and garment sector in the context of participating the TPP?
2.2. The task of the thesis research
The thesis is mainly focused on the following basic tasks:
- Interpretation is the theoretical issues about the competitiveness of sectors,

textile and garment sector. Factors affecting these problem. Advanced research
experience about the competitiveness of textile and garment sector in some countries.
From which to draw some valuable lessons referring to the improving competitiveness
of Vietnam's textile garment sector.
- Analyze and evaluate the current status and development of the competitiveness
of Vietnam’s textile and garment sector in the context of participating the TPP. From
that point out the achievements, limitations, causes and problems.
- Recommended by several perspectives, solution-oriented and primarily in order
to improve the competitiveness of Vietnam’s textile and garment sector in the context
of participating the TPP joining the TPP.
3. Object and scope of the thesis research
3.1. Research subjects
Study subjects of the thesis is the competitiveness of Vietnam's textile and
garment sector and the impact of the TPP to these sector.
3.2. Research scope
- The scope of content: The thesis focuses in-depth analysis and situation
development of the textile and garment industry competitiveness Vietnam period 2007
- 2015. The thesis also refers to the elements of the environment both inside and
outside that affect the competitiveness of Vietnam's textile and garment sector in the
context of participating TPP.
- The scope of space: The thesis mainly research the competitiveness of
Vietnam’s textile and garment sector participating in the context of TPP. Research
sites are textile and garment sector in the country.
- The scope of the time: The thesis mainly uses data from 2007, is the period
when Vietnam began to participate WTO, participated in the negotiation and signing


3
of the new generation FTAs, full participation in the TPP. Policies related to the
competitiveness of the textile and garment sector from 2010 up to now.

4. The methodology and research methods of the thesis
- Research approach of the thesis: The thesis implementation process, the
authors performed a systematic approach including access to the rationale of
competition, the competitiveness of the sector in order to see clearly nature, meaning
the contents need to take to improve the competitiveness of the sector.
- Methodology of research: The thesis uses the method of dialectical materialism
and historical materialism as the foundation base of the methodology,
The method is mainly applied in the implementation of the thesis include:
1. Methods of analysis - comparing: thesis research, analytical models and
elements of competition, the competitiveness of the sector, to draw scientific
conclusions about the pattern of selective and those factors.
2. Method Expert: The thesis will summarize comments, quoting the opinion of
experts, business leaders ngiep, textile associations ... about the problems that are
facing the textile industry, competence competitive textile and garment sector, the
solution to take advantage of opportunities, overcome challenges when participating in
the new generation FTAs.
3. Research Methodology situations: The thesis also uses analytical methods to
study situations: case study of the competitiveness of the textile and garment industry
cluster in the city. Ho Chi Minh and some neighboring provinces such as Binh Duong,
Dong Nai, textile and garment industry cluster key economic region of Tonkin, the
two regions accounted for 80% of the total number of textile and garment enterprises
in the sector.4. Research methods used in combination approach value chain analysis
and evaluation sector competitiveness clusters.
4. Synthetic Methods of analysis: The author analyzes use synthetic methods to
interpret data, contact the practical reasons for the content of the competitiveness of
Vietnam's textile and garment sector in the context of participating the new generation
FTAs, namely TPP.
5. Research methods use a combination approach to value chain analysis and
evaluation sector competitiveness clusters: The use of cluster coordination approach
and the industry value chain will help analyze and identify a comprehensive

comparative advantages and competitiveness of the actors in the value chain, and can
assess the coherence, support service providers, related industries and institutional
support for the core activities of the textile and garment sector.


4
Also thesis also uses a number of methods such as SWOT method, system analysis
method ......
- Gathering and processing of data: Data were collected from the statistics of the
General Statistics Office, the World Bank, the General Statistics Office, General
Department of Customs, Vietnam Textile and Garment Association, Chamber of
Industry Vietnam Industry and trade, the Association of cotton yarn, the world Bank,
Uncomtrade, WTO, Institute for economic management Central, WTO Center,
research professionals in national and international, workshops the new generation
FTAs, textile and TPP, ... ..
- The process and method of evaluation competitiveness Vietnam's garment
sector is following these steps:
Step 1: Research overview of the work related to sector competitiveness, the
textile and garment sector.
Step 2: Determine the theoretical basis of the competitiveness of the textile and
garment sector.
Step 3: Assess the competitive situation of the Vietnam ‘s textile and garment
sector in the context of participating TPP. Also the thesis uses a number of methods
such as meta-analysis Method, SWOT method, system analysis method ......
5. New scientific contribution of the thesis
The new contributions of the thesis are as follows:
The thesis systematizes and clarifies the content of competitiveness, the analysis
of sector competitiveness. The thesis also analyzes the competitive levels in textile and
garment industry; and proposes the criteria for evaluating the competitiveness of the
textile and garment industry. On the basis of applying the model of John Dunning, the

thesis has evaluated the factors affecting the competitiveness of textile and garment
industry in the context participation in the new generation FTAs (namely TPP) and
clarify the effectiveness of the new generation FTA commitment to the strategy;
foreign investment; production conditions; structure and competition of textile and
garment industry as well as for supporting industries for the textile and garment
industry, and other related industries.
The thesis has drawn lessons learned can apply to improve the competitiveness of
Vietnam’s textile and garment industry in the context of participation in the new
generation of FTAs (namely TPP), on the basis of reference the experience of
countries with developed textile and garment industry.
The thesis has analyzed and assessed the real situation of development and
competitiveness of Vietnam's textile and garment sector in the past period; proposed


5
valuable conclusions about the achievements, constraints and causes of these
limitations.
The thesis has proposed some solutions to promote the development and enhance
the competitiveness of Vietnam's textile and garment sector to participate in the TPP
and other new generation FTAs.
6. The meaning of theoretical and practical thesis
* Meaning theoretical: The thesis presents a systematic theoretical issues to
clarify the nature of the industry competitiveness, the perspective analysis sector
competitiveness. Also specify characteristics; evaluation criteria, the level of
competitiveness of the textile and garment sector as a basis for evaluation of industry
competitiveness textile industry in general and in particular. The thesis also used the
"diamond" of Dunning with six basic factors as a basis for reasoning to analyze,
evaluate the factors affecting the competitiveness of textile and garment sector in the
context of participation the new generation of FTAs (namely TPP).
* The meaning of the practice: The dissertation give lessons to improve the

competitiveness of domestic textile and garment sector, and draw the outstanding
results and weaknesses of the industry need to be overcome Vietnam's garment. The
thesis also points out the opportunities and challenges for Vietnam's textile and
garment sector, which has great significance to improve the competitiveness of the
textile and garment industry in the new context. The research results of the thesis is a
reliable reference for the Association, the state management agencies and enterprises
as a basis for making plans, strategies and policies .... appropriate to make the most of
opportunities and overcome, the challenges that restrict new generation FTAs in
general, in particular TPP gives textile and garment sector as well as other
manufacturing sectors in Vietnam.
7. Structural thesis
Besides the introduction, conclusion, list of references and appendices of the
thesis structure is presented in four chapters:
Chapter 1: Overview of the study.
Chapter 2: Rationale and international experience on improving competitiveness
of the textile and garment sector.
Chapter 3:Reality competitiveness of Viet Nam textile and garment sector in the
past.
Chapter 4: Perspective, orientations and major solutions improving the
competitiveness of Vietnam's textile and garment sector in the context of participation
the TPP.


6
Chapter 1: OVERVIEW OF THE STUDY
1.1.The competitiveness research in the world.
1.1.1. The general theory of competitiveness
Michael Porter, has proposed 5 the pressure pattern. There are also studies of
Krugman; Organisation for Economic Co-operation and Development;
Competitiveness Council of America; There are many authors as M. Porter and

K.Ketels discussed competitiveness, issues around competitiveness, views on
competitiveness
1.1.2. Sector Competitiveness
Typical research According to the United Nations; Porter (2008); Van Duren
(1991) ...
1.1.3. The evaluation criteria and factors affecting industry competitiveness
About the indicators reflecting the sector competitiveness studies, such as
research & John C.S Sirikrai Sajee B. Tang (2006), market share (Anderson & Soha,
1999; Lau, 2002); sales; growth in sales (Anderson & Sohal, 1999; Li, 2000); and
labor productivity (Noble, 1997; Ross,) ......
Factors affecting industry competitiveness, there are researchers of Michael
E.Porter, in his "national competitive advantage" book. Or John Dunning's research
(1993), the author expanded model Porter's diamond in the conditions of globalization
and integration of world economy
1.1.4. The study of the textile and garment sector, improve the capacity of
textile and garment sector
There are some researchs that estimating of the textile industry in some
countries such as the author's article Mohammed Ziaul Haider (2007) on the
competitiveness of the Bangladesh garment industry in major markets; Michaela D.
Platzer: Production of the US textile and TPP (2013), the article made the comments
on the development of the US textile industry to join the TPP; M.Zakir Hossain
(2010): Report on the textile and garment industry of Vietnam; Vanzetti, David and
Pham Lan Huong (2014), "The rules of origin, labor standards, and TPP"; Fukunishi
and Yamagata (2014): "garment industry in countries with revenues low: A path to
industrialization "; Ingvild Bakken (2014):" Renovation of the entire apparel value
chain: An analysis of the competitiveness of developing countries in Asia with China
in manufacturing garments "...
1.2. Research situation in Vietnam.
1.2.1. Research on industry competitiveness.

7
There are the competitiveness researchs of Ton That Nguyen Thiem; or the
research of Bach Thu Cuong .... Research Nguyen Manh Hung (2013): "Improving the
competitiveness of Vietnam's telecommunications sector"; Bui Duc Tuan (2010):
"Improving the competitiveness of the seafood processing industry of Vietnam; United
Win (2015): "The competitiveness of Vietnam's rubber industry in international
integration process" ... ..
1.2.2. Studies on textile and garment sector and competitive textile and garment
1. The study of the textile and garment industry, textile products: Book (2014)
"The value chain of electronic products and apparel in the province of Hanoi" by
Nguyen Dinh Duong; Nguyen Anh Duong, Dang Phuong Dung: "Vietnam has joined
the WTO and free trade agreements (FTA): Implications for garment exports"; Dinh
Truong Pictures (2013), "Development of light industry in Vietnam: to create jobs and
prosperity in an economy average earnings"; MPI project "Construction investment
incentives in the field supporting industries. "
2. Research on competitive textile and garment sector: Research and Economic
Management Central; The article by the authors Truong Hong Trinh, Nguyen Thi Bich
Thu, Nguyen Thanh Liem (2010); Le Anh Tuan (2013), "Comparative advantage of
Vietnam's textile and garment industry"; Office of the National Committee for
International Economic Cooperation: "Reports of international economic integration in
the textile sector - locally Fashion"; Public Policy Institute / Institute for Economic
Management Central (2013) reports: "The survey assessed the competitiveness of the
textile industry cluster in the city and some neighboring localities", the Ministry of
Industry and Trade (2013): "report assessing the situation of textile industry
development and the ability to improve competitiveness through increased exploitation
of the factors related to trade." ...
3. Studies of TPP and textile and garment sector studies such as Vietnam,
Textile and Garment Association (2013): "Survey research report Vietnam's garment
industry in 2013"; Women Entrepreneurs Council of Vietnam (2014): Research

Report, "TPP - Opportunities and challenges for Vietnam's textile and garment sector
"; Tran Thi Thu Hien (2013), "Forecasting the impact of the agreement Trans-Pacific
Partnership (TPP) to the textile export market of Vietnam in the United States and
Japan"; Pham Minh Duc (2014), the World Bank, "Vietnam Textile and Garment
Industry in the context Implementation Agreement Trans-Pacific Partnership (TPP)";
...... ..
1.2.3. Overview Agreement Trans-Pacific partners.


8
Agreement on the Trans-Pacific Partnership (TPP) was signed by 12 countries,
including Australia, Canada, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand,
Peru, Singapore, United States and Vietnam, have provided economic model
accounted for 40% of GDP and 30% of global trade. This is a free trade agreement the
new generation, the nuclear development framework forming regional trade and the
world meet higher requirements in the context of development of productive forces
rapidly and global integration deeper economic. TPP Agreement is a comprehensive
market access, ensure the free movement of factors of production through the
commitment rapidly eliminate export taxes, import and non-tariff barriers; create a fair
business environment, non-discrimination; trade facilitation, investment, bringing new
benefits for business, for employees as well as consumers (including 30 chapters).
1.3. Research gaps
1.3.1. Overall evaluation study situation
First, studies have contributed to systematize theoretically and make
observations and different evaluations of industry competition, industry
competitiveness, perspectives, criteria for evaluating competitiveness branch....
Second, some studies have assessed about Vietnam's textile and garment sector
worldwide including human resources, financial, garment industry supporting
industry, the value chain of the textile and garment industry, the status cluster textile
and garment industry

Third, studies on the status of the textile and garment industry, opportunities
and challenges of the textile and garment sector when Vietnam attend the new
generation FTA.
Fourth, studies have used quantitative research methods and quantitative analysis
and evaluation of textile and garment sector, textile and garment sector competition ...
but the only method of assessment in specific issues card.
1.3.2. Research gaps.
Vietnam’ textile and garment sector in recent years has grown to be one of the
key industrial sector, whose role and important position in the process of the world
economy. Especially when our country is increasingly involved in many new
generation FTAs, poses new opportunities and challenges for Vietnam's textile and
garment sector. Although there have been some studies on the opportunities and
challenges as well as the impact of the TPP to Vietnam's textile and garment sector.
But no specific study to clarify the status development and competitiveness of
Vietnam's textile and garment sector before joining TPP
1.3.3. Thesis research framework


9

Chapter 2: RATIONALE AND INTERNATIONAL EXPERIENCE
ON IMPROVING COMPETITIVENESS TEXTILE AND GARMENT
SECTOR.
2.1. The basic concept of the competitiveness of the sector
2.1.1. The concept of competitiveness
In general, the term "competitiveness" or "competitiveness"

and

"competitiveness", used much in our country, including:

According to M. Porter, then, competitiveness means only when considered at
the national level is productivity. According to Krugman, then, more or less
competitive fit only enterprise level because the lower boundary is very clear here, if
companies do not compensate well. World Economic Forum consider that
"competitiveness is the ability of a country to achieve the growth rate of per capita
income and high sustainability."
2.1.2. The level of competitiveness.
There are many different views on competition, competitiveness, but many
studies have identical views with 4 levels of competition as follows:
1. National Competitiveness: National Competitiveness can be understood as the
construction of a common economic environment, ensuring effective distribution of
resources, achieve and sustain high growth, sustainable .


10
2. Sector Competitiveness: Theo Van Duren (1991) compete at the sector level is
"the capacity to maintain profitability and market share on the domestic and foreign
markets"; longer follow Ash, Brink, L. (1992) suggests that "a sector is considered
competitive as this industry is capable of producing up profits and maintain market
share in the domestic market and internationally" .
3. Competitiveness of Enterprises: So far there is no unified concept of the
competitiveness of enterprises. According to the Organisation for Economic Cooperation and Development (OECD, 2006), the competitiveness of the productive
forces now are relatively high income on the basis of use.
4. Competitiveness of products and services: The competitiveness of products
and services is our superiority compared to products or services of the same type as the
other competitors offer on the same market, is the ability to hold and increase their
share of the product or service in the market.
2.1.3. The views of the industry and assess industry competitiveness
2.1.3.1. The views of industry
Currently, the concept of "industry" is used in a variety of conditions and have

different meanings according to the specific perspective. According to Porter, a sector
(product or service) is an enterprise group producing products or services that the
products or services that compete directly with each other.
In this thesis, the concept of industry is understood as a set of business and offers
a range of products for the market. Thus, in terms of competition, a branch of a nation
will include national firms that join to provide a product category and will compete
with the business of other countries, on the international market and domestic market.
2.1.3.2. The opinions assess, analyze industry competitiveness
When evaluating the competitiveness of an industry, there are many different
views. In this thesis, industry competitiveness level will be assessed as the overall
competitiveness of the business sector constitutes a nation rather than the overall
competitiveness of individual firms. Currently there are many ways to analyze the
competitiveness of the sector, but in the thesis the author presents four perspectives:
- Analyze the competitiveness of the industry based on neoclassical perspective:
- Analyze the competitiveness of the sector in view of strategic management
- Analyze the competitiveness industry value chain
- Analyze the competitiveness of the sector in view synthesis
In the thesis the author also choose synthetic perspective to analyze the
competitiveness of textile industry in the context of participation in the new generation
FTAs.


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2.2. The role and characteristics of the textile and garment sector
2.2.1. The role of the textile and garment sector
The industry consists of roles, such as contributing to economic development;
serve the needs of consumers; contribute to exports, expand international trade;
contributing to creating jobs for workers and economic restructuring.
2.2.2. Features of the textile and garment sector
Each industry has its characteristics and particularities. But in terms of

competitiveness, the textile sector has the following basic characteristics: Due to the
nature of the textile industry is the role of the support industry is huge textile industry
tends to translate move from high-cost place to where costs are lower. Textile and
garment sector under the influence of the scientific and technical advances have the
potential to impact on the Textile and garment sector. ....
2.2.3. The competitive level of the textile and garment sector
According to several studies, the textile industry competitive with 4 levels: Level
1 is based primarily labor costs; Level two, technological elements of machinery and
equipment is important; Level 3, the level of competition here is relatively complex,
demanding process of accumulation and long-term development, require resources to
accumulate large enough; Level 4, At this level consists of 2 main factors: Brand and
material technology.
2.2.4. The criteria for evaluating the competitiveness of textile and garment
sector
2.2.4.1.Thi export.
2.2.4.2. Labour productivity
2.2.4.3. Revenue
2.2.4.4. Profit
2.2.4.5. System will display comparative advantage industry
2.2.4.6. Investment in research and deployment
2.3. Analysis of factors affecting the competitiveness of the textile and
garment sector.
M. Porter came up method competitiveness analysis structure for each sector,
whether domestic or foreign operations, the nature of competition in the 4 factors and
these factors interact with each other , creating different motivations for competing
sectors: conditions of production factors; Demand conditions; The support and related
industries; Capacity and industry structure. To better suit the new conditions, the
Dunning J. (1988) was based on the model of 'diamond' of Porter to build models
'diamond' improvement using 2 factors are the State and investment foreign. In

12
addition to 4 elements of the pattern "diamonds", the external factor is the role of the
State also impact this model.

Chart 2.2: The model applies diamonds thesis
Source: John Dunning (1988), Explaining International Production, Unwin
Hyman, London, and the synthesis of the author
This model needed reviewing, analyzing and assess the competitiveness of
Vietnam's textile and garment sector. Therefore the thesis will use the diamond model
of Dunning J. (1988) when the review, analysis and assessment of the competitiveness
of this industry: factor conditions for production factors the industry; Demand
conditions in textiles and garment sector; Strategy, structure and competitiveness of
companies in the sector; Supporting industries concerned; The role of the State;
Foreign investment ; Free Trade Agreement new generation.
2.4. Experience improving the competitiveness of the textile and garment
sector of several countries and lessons for Vietnam
2.4.1. The experience of East Asian countries
2.4.2. The experience of the countries of South Asia
2.4.3. The experience of the member states Partnership Agreement Trans-Pacific.
2.4.4. Lessons learned to imprrove the competitiveness of textile and garment
sector Vietnam


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Chapter 3: REALITY COMPETITIVENESS OF VIETNAM TEXTILE AND
GARMENT SECTOR IN THE PAST.
3.1. Overview of Vietnam's textile and garment sector
3.1.1. Historical development of the Vietnam’s textile and garment sector.
- In the period from 1955 to 1990

- In the period from 1990 to 2007
- In the period from 2008 to the present
3.1.2. Market and product structure of the export of textile and garment sector.
Markets include the US, EU, Japan, the domestic market ....
3.1.3. Supply chain of the textile and garment sector in Vietnam.
Vietnam's garment stages now use more than 8.5 billion m2 fabric which
imported nearly 7 billion m2, remaining in the country provided more than 1.5 billion
m2. However, this material can not be produced Vietnam, most are imported, this has
led to reliance on the price of raw materials and materials from abroad
Table 3.2: The capacity of each segment in the chain stitch Vietnam’s textile
and garment compared to the current global.
Quantity

Suture
clip

Detail

Unit
Global

China

Viet
Nam

Percentage
VN / Global
(%)

Ball

Million tons

27

7,3

0,005

0,018

Shove

Million tons

48

29

0.2

0.41

Spinning

Spindles

Million

250

120

6,2

2.48

Textiles

Few

billion m²

170

86

1,7

1.00

Export

Garments

Billion

770

247

24

3,2

Material

Source: Survey Report textile sector in 2013 and the sum of the author
3.2. Status of factors affecting the competitiveness of the Vietnam's textile
and garment sector.
3.2.1. The conditions of the production elements of the textile and garment
sector.
- Human resources in the textile and garment sector
- The quality of human resources


14
- The capital and growth capital
- The technological level
- Infrastructure
3.2.2. Market demand
- Expenditure of the people of Vietnam
- Expenditure of the countries in the world and the Member States TPP
3.2.3. Strategy, structure and competitiveness of enterprises in the textile and
garment sector.
- Allocation of textile and garment enterprises across the country is uneven
- The decline of the domestic business sector and rapid growth, stability of the
FDI
- Vietnam's textile and garment exports mainly located at the stage of processing,

using low-tech, value-added revenue is not high
- Button bottlenecks in weaving, dyeing, finishing
Compared with competitors in the region, labor costs of Vietnam's garment relatively
low, but the cost of production - not the low trading
- Selling prices of textile goods Vietnam compared to other countries is relatively
high, the product quality is not high
3.2.4. Related industries and support textile and garment sector.
The number of industrial enterprises to support the textile and garment industry
in 2013 is approximately 1,278 enterprises, accounting for 31.26% of the total
business sector. The fabric manufacturing enterprises accounted for 52% the highest
number, followed by the enterprises producing yarn, sewing and dyeing 22%, is 14%
complete. These figures are very low on the value of intra-regional levels shows that
will be a challenge for Vietnam enterprises to shift capital input supply is largely in
China, Taiwan to the market under the TPP. On input, Vietnam imported textile
materials largely from abroad, in which 39.34% are from China. The dyeing and
finishing industry, machinery industry - textile equipment, chemical industry, fashion
industry, other industries, marketing and distribution activities are limited
3.2.5. Foreign investment for the textile and garment sector.
In the recent period the textile and garment sector had attracted sizeable FDI
inflows, with many projects scale.
3.2.6.Vai State game
These elements provide the foundation for creating sustainable development for
Vietnam's textile and garment sector industrial park planning; transportation
infrastructure; environmental issues, waste water treatment; stable tax policy, fees,


15
procedures and policies ... wages. The guidelines and policies of the government has
been actively supporting the sector. However policies for development and improve
competitiveness for the textile and garment industry is limited, such as textile industry

planning, industrial development policy support, training policy, labor policy , wages,
tax policy, exchange rate policy, credit, environmental policy ... ..
3.3. Situation competitiveness of Vietnam's textile and garment sector
through several criteria.
3.3.1. Export market share of Vietnam's textile and garment sector.
As of 2012, Vietnam was ranked 7th among the top 10 countries on exports of
textiles and garments globally. By 2014 the country was ranked 5th in the world in the
export of textiles. In the period 2005 - 2013, Vietnam's textile garment industry is the
country with the export growth rate of the world's fastest. In this stage of Vietnam
textile growth rate reached double digits of 17.5%. A growth rate is quite impressive,
beyond China, India, Bangladesh but mainly garments, and textile products, the slow
growth ....
3.3.2. Labour productivity of the textile and garment sector in Vietnam.
In the period 2009 -2014, labor productivity of the textile industry in general,
textile and garment industry in particular are likely to increase. In which labor
productivity growth of the textile and garment sector higher (Chart 3.12).
2.5
2

labor productivity of textile
industry

1.5

labor productivity garment
industry

1
0.5

textile labor productivity

0
Year 2010 Year 2011 Year 2012 Year 2013 Year 2014 Year 2015

Chart 3:12: Labour productivity of the textile and garment sector.
Source: Statistical Yearbook and author's calculations.
Currently, labor productivity is one of the weaknesses of Vietnam, not only in
this industry which is the current situation for the whole country. Labor productivity in
Vietnam the average is very low if compared with other countries in the region of 40%
of Thailand as well as from a number of Member States TPP. Labor productivity index
of the manufacturing sector was only 2.4 Vietnam; while countries other big textile
production such as China, Indonesia is 6.9 and 5.2.
3.3.3. Sales of Vietnam's textile and garment sector.


16
Revenue Vietnam's textile and garment sector in the period 2009 to 2014 have
increased, sales of both garments and textiles sector increased (Figure 3.13). Sales of
both the textile and garment industry has increased. Revenue of the industry more than
80% as exports bring. The growth rate of garment export turnover of Vietnam is
relatively high compared with competitors in the region such as Indonesia, Malaysia,
Thailand and Cambodia. Yet there is a paradox of Vietnam's textile and garment sector
but revenue increased profits tend to fall.
3.3.4. The profits of the textile and garment sector in Vietnam.
Although growth peaked but the nature of the industry profits remained low.
Currently, the value added this industry profit margins low as 5-10%, and 70% simply
cut garments, but to move to a higher position in the value chain, requires investment
big in technology and human resources. If compare the profitability of business type
Vietnam's textile garment sector than China in 2010, the enterprises generally Vietnam

is lower than China.
3.3.5. Comparative advantages of Vietnam's textile and garment sector.
When engaged in free trade agreements such as the TPP, Vietnam - EU, AEC ....,
Vietnam's textile garment was judged to be a major competitive advantage. Index
comparative advantage balance (RCSA), Vietnam's textile and garment sector than
TPP: Looking at the table we see the comparative advantage balance of Vietnam's
garment sector than TPP is 0.8, which suggests when Vietnam joins the TPP, the
industry has great advantages; Index comparative advantage (RCA) in Vietnam
compared to the TPP countries: In relation to the production of products, Vietnam, the
products have comparative advantages such as: garments, textiles ,. .. the kind of
knitted or crocheted (HS60) and cotton fleece, felt and nonwovens; special yarns; ......
then Vietnam has comparative advantage is not high compared to other countries
Malaysia, Japan, Australia, ......
3.3.6. Research and development of Vietnam's textile and garment sector.
According to the results of the business survey in 2011 by the General Statistics
Office carried out, as of now answered, the total cost of technological innovation and
scientific research is relatively low. At this stage of the textile of Vietnam should have
a pretty long time to keep up with other countries in the region and the world.
3.4. Overall assessment of the competitiveness of textile and garment sector
in recent years.
3.4.1. These results
Firstly, Vietnam's textile and garment sector continues to be the manufacturing
sector, a key exporter of the economy, holding an important position in GDP growth


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and contribute to economic restructuring, guarantee Social Security. Some of the state
policy support for the textile industry has been effective.
Secondly, terms of market share, as of today's textile and garment exports
Vietnam was at 180 countries and territories around the world. Revenue and market

share of the textile industry continued to increase in recent years. Vietnam became a
textile exporter in the top 5 in the world. In the value chain of the textile and garment
is seen with the most outstanding strengths capable of competing on the big markets
like the US, Japan, EU, ... trade promotion has been increasingly expanding by joining
the FTA, especially the new generation FTA.
Third, the domestic textile and garment market not only focus on exports as
many years ago, the last time, the textile business - may have been considered more
important than the domestic market makes the textile market - domestic sewing day
The more prosperous. Some brands of the industry has been known to consumers.
Fourth, Sewing equipment has been innovating and modernizing to 90%, the
business environment in Vietnam has changed more suitable for foreign investors. Full
localization ratio textile and garment sector has been increased considerably and tends
to increase, though not meet the development requirements of the sector
3.4.2. Limit
First, the value added textile and garment sector in Vietnam is low, export
processing methods mainly for export processing. Besides textile industry focuses too
heavily on export markets such as the US, Japan, EU ... It is difficult markets and
difficult to control, vulnerable. Meanwhile, the domestic market has not been adequate
attention, are open to the surrounding countries. Production costs of Vietnam's textile
garment sector despite high labor costs are relatively low. Distribution activities of the
Vietnam Textile enterprises today still depends on foreign traders, the business support
services is poor. Trade promotion activities, providing market information is limited.
Second, industry support for the industry is under-developed in terms of both
quality and variety; Domestic production is heavily dependent on imported raw
materials, creating the development imbalance and vulnerable. Technology,
equipment, textile machinery uncompleted, yet modern, lack of investment capital
should the production capacity of the textile industry has not met the demand for
export garment industry led to a situation "The textile industry , the garment industry
is not required; The garment industry needs, textile no ".
Third, labor productivity is low textile and garment sector. The quality of human

resources is still low, especially high-quality human resources and manpower for the
textile industry, human resources, marketing, business management ... lacking and


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weak. Product research and development (R & D), in particular to the design model is
still a weak point of Vietnam's garment industry at present. In terms of level of
competitiveness of the industry, the textile and garment sector of Vietnam is at level 2,
the average level
Fourth, our country's textile and garment prises Vietnam are competing mainly
in machining operations for low and middle-income segment. FDI accounts for a
considerable share of the export value of textile and garment sector and tend to rise in
the coming period.
Fifth, Vietnam's "textile and garment powers" Asia's only join the TPP can be
considered an opportunity. However, there are not only committed to show Vietnam
can not always take advantage of the opportunity, but also face a significant risk of
joining the TPP. Many textile and garment enterprises have not met the conditions to
benefit from the tax TPP agreement.
3.4.3. The cause of limitations.
1. Industry support less developed, structured textile and garment sector
development imbalance: The policy priority for the Government issuing SI is also very
common in the general cause of local, difficulty sectors applying incentives for
businesses; development investment for huge supporting industry, whereas most of the
textile enterprises are small, access to capital is limited. Cause of the largest and most
important undeveloped SI Vietnam is the competitiveness of the product, as the link
between the low now, very few businesses build relationships with the strategic
cooperation related customer; the technological level of enterprises Vietnam is still
limited, according to the Vietnam Association of cotton yarn production, the program
1 billion meters of cloth fabric and garment export industry fails ....... Textile industry
currently focuses on developing just in sewing garments, but other phases are not

synchronous development. Supporting industrial development requires expensive
textile processing environment for very high, so their products have higher costs of
imported products should not attract the attention of manufacturers, and local means
nor salty. Rate of return on invested capital for manufacturing materials for low, long
payback period. Yarn and fabric products domestic production is not diversified, high
quality should not only use 20-25% of the production for export garment industry
output leads to the lack of a major raw material for the development of joining the
FTA new generation. Besides the ability to manage the production, research and
development is weak; textile mechanical engineering, fashion design, production and
auxiliary materials .. not meet development requirements ..


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2. The quality of human resources is limited: human resources of Vietnam in line
with the current structure of the textile and garment sector, but has not met the
requirements for restructuring the industry to develop the upstream stages as textiles
dyed ... .The factors preventing the development of Vietnam's textile and garment
issue of workers consciousness; qualified laborers plus low technology equipment
sector enterprises spinning, weaving, dyeing more backward countries in the region;
most of the staff personnel in the textile business from other industries are switching
to, but with experience in management but lack the specialized knowledge, thereby
reducing the effectiveness of human resource management in business ... Besides
training issues in-depth human resources for the textile industry and dyeing and
finishing is limited, skilled engineers lack dyeing, human fashion designer trained in
Vietnam only capable of small-scale business that can not design and implement
production to commercialization with the scale of the whole sector; not build national
brand to grow on the world market; the training of manpower for the textile industry is
failing to meet the actual needs ... The cooperation and links between textile industry
cluster with research institutes, universities - colleges - vocational training and
institutional support is very limited, failing to meet the requirements of industrial

development.
3. The degree of association between the less efficient enterprises, clusters of
textile and garment industry is still underdeveloped: Currently the link between the
level of textile enterprises are still weak, participation in global value chains are still
inadequate . Restrictions on visionary investment scale large plants, small and medium
enterprises have the potential not connected, no ability and financial capacity to invest
in this area to deep link chain, many now neglected domestic market ... Due to the
number of production enterprises of the sector imbalances, small-scale production.
Moreover, the area of operation of businesses scattered throughout the country, has not
formed many textile industrial clusters. Along with the majority of Vietnam's garment
enterprises are small and medium-sized, so you do not take advantage of scale to
reduce costs, while importing raw materials long, along with the inability to meet large
orders and stringent service requirements ... Vietnam's textile and garment enterprises
to take advantage of the highest efficiency TPP must be formed within the supply
chain, there is a link between organic to go to a chain stitch providing complete design
- raw and auxiliary materials - sewing - distributed in the community formed the
participants in the TPP Agreement. The lack of links between businesses, is something
worth worrying Vietnam's textile and garment industry in addition to limited capital
and governance capabilities. Vietnam’s textile and garment to development is crucial


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to the establishment of industrial clusters and solving materials are knots of sewing
wastewater treatment dyed or kinds of materials related to the environment such as
plating in producing metal buttons or the stages of the garment industry as cleaning,
printing
4. Technology is backward, lack of funds to expand the size of the business: In
recent years the textile business had to invest to conduct technological innovation
activities, but the investment in innovation between textile and garment industry there
are many differences. Garment industry with innovative investment pace quite fast,

while the textile industry with innovative technology speeds much slower. Due to the
textile industry needs large investment, implementation time and long payback, so the
rate of investment as well as capital for the sector in general remains difficult, the
normal take about 2 years can go into production so projects planned implementation
is often slow start or not feasible. Many businesses, especially small businesses, or
both, do not have enough capital to meet the needs of expanding production facilities,
upgrade technology ... while it is difficult to search for formal credit sources. This
situation is due to the construction business was not strategic or business plan
compelling enough, while the procedures for bank loans remains difficult, strict, and
sometimes not facilitate for Business. Moreover, businesses are often small scale, so
the loan is primarily up to the high interest rate rise will increase costs and reduce the
competitiveness of products. Thus investment in spinning, weaving, fabric last time
still mainly from the business sector FDI.
5. In terms of state policy: There is a contradiction in the policy of the State to
invest textile and garment ; The business environment for the textile industry is still
limited. The policy support and development of textile and garment sector is
inadequate, failing to meet the requirements set out for integration, especially TPP,
such as institutional capacity of the Vietnam insufficient to effectively implement
policies , the policy of the state, especially at the local level; lack of specific guidelines
for the implementation of policies should the same policy many different
interpretations; general lack of coordination between departments in the
implementation of policies; greater capacity to convey and implement the central
policies at the local level is very limited. State policies on SI, training and specialized
inspection, credit policy, exchange rate policy · Contains ...... really clear and
effective, sometimes making it difficult for businesses in the sector. Along with the
competitiveness of the lowest countries in the fields of science and technology,
education and training, innovation .... has affected the textile and garment sector.
Planning and development-oriented garment sector is inadequate and unsuitable to the

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conditions, the new context, the infrastructure is not guaranteed, even backward.
Changing laws and policies to support investment in Vietnam too often, not including
the factors inadequacies in the process of change should affect directly or indirectly the
investment strategy of the enterprise development. Especially no legal support to small
and medium-sized enterprises have a legal basis to support in order to help this type of
enterprise sustainable development.
6. Brand of Vietnam's textile and garment sector is weak, overall production
costs are high: Because the biggest limitation of the current enterprise resource
capital, human resources, mechanisms and policies on preferential capital borrowing
ceiling limit on advertising, media, marketing and maintaining brand ... in particular,
the biggest obstacle of the business is not all the brand strategy, brand architecture
which is reinforced basic core. Higher production costs due to: a minimum wage
policy, wage deductions are not appropriate, exchange rate policy, dependent import of
raw materials, low-tech, cost high ... corporate governance.

Chapter 4: PERSPECTIVE, ORIENTATION AND MAJOR SOLUTIONS
IMPROVING THE COMPETITIVENESS OF VIETNAM’S TEXTILE AND
GARMENT SECTOR IN THE CONTEXT OF PARTICIPATIN IN TPP.
4.1. The international context and the domestic impact on the
competitiveness of textile and garment sector of Vietnam.
4.1.1. International context.
- The trend of shifting textile and garment sector.
- The impact of the Agreement on the Trans-Pacific partners to Vietnam's textile
and garment sector. The quantitative analysis in the report of the World Bank also
showed that textile industry is one of the sectors that will enjoy the most positive
impact.
4.1.2. National context
- The potential development of Vietnam's textile and garment sector
- SWOT Analysis of Vietnam's textile and garment sector in the context of

participating Partnership Agreement Trans-Pacific.
4.1.3. The problems posed to Vietnam textile and garment sector in view of
competitiveness required by the Agreement on the Trans-Pacific partners
The problem posed to the textile and garment sector to be solved, such as rules of
origin from yarn onward; implementation of commitments on labor; environmental


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pollution problems in the textile and garment sector; technical barriers and trade
remedies, intellectual property ....
4.3. Views and orientations improving the competitiveness of Vietnam’s
textile and garment sector in the context of Partnership Agreement Trans-Pacific
4.3.1. Viewpoint improving the competitiveness of vietnam’s textile and
garment sector in the context of the Partnership Agreement Trans-Pacific
One is, should take advantage of the opportunity to participate the TPP to attract
investment to upgrade the textile and garment value chain.
Second, take the added value, the development of supporting industries to target,
and is a measure of the competitiveness of the textile industry when joining TPP
Thirdly, the need to restructure the textile and garment sector to make the most of
the advantages that the new generation FTA brings, including TPP
Fourth, develop and enhance the competitiveness of textile and garment sector in
defending the need to balance the benefits and environmental protection
4.3.2. Orientation of improving the competitiveness of Vietnam’s textile and
garment sector in the context of the Partnership Agreement Trans-Pacific.
First, the need to upgrade and strengthen the links and cooperation in textile and
garment clusters
Second, improve competitiveness at both the national and sector level
Third, in the short term should focus on developing and improving
competitiveness for export garment industry to take advantage of market opportunities
Fourth, strengthen cooperation with professional training facilities to create highquality workforce

4.4. The main measures to improve the competitiveness of textile and
garment sector in Vietnam in the context of the Partnership Agreement TransPacific.
4.4.1. Technological innovation investment, mobilizing capital in order to
expand business scale textile and garment sector
Equipment investment technology innovation factor plays a decisive role for the
development of textile and garment sector. The textile and garment enterprises need to
diversify capital mobilization forms
4.4.2. Training human resources, improving labor productivity to meet the
requirements of the free trade agreement next generation.
Improving the quantity and quality of human resources is the solution for
sustainable development and long term of the textile sector, in which the training role
is especially important to match the context of globalization, the shift production


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textile export from industrialized countries to the developing countries. The textile
industry enterprises to improve labor productivity.
4.4.3. Construction industry value chain and support for the textile and
garment sector
Currently in the textile supply chain at any business that do all the stages from
fiber to garments that have specialization, each now made a step, it is suitable to
Vietnam when near 97% are small and medium-sized enterprises
4.4.4. Construction and upgrading of the textile and garment industry clusters,
strengthening linkages and cooperation between the textile and garment enterprises
To accomplish this matter, requiring the efforts and cooperation of many
stakeholders, especially local and Garment Association, Association of Cotton Yarn
and Chamber of Commerce and Industry of Vietnam, the Ministry of Industry and
Trade and the Ministry of Planning and Investment, Ministry of Finance ....
4.4.5. To improve policies for the textile and garment sector and improve
production and business environment

Regarding administrative reform; business environment; additional industrial
development policy support textile sector; For import and export procedures, test
subjects; To encourage innovation, technological innovation and create the most
favorable for business.
4.4.6. Branding, cost savings for enterprises in the textile and garment sector.
Currently branding of Vietnam Garment remains weak. High production costs
and low productivity are the barriers to the competitiveness of Vietnam's garment
sector.
4.5. Conditions for the implementation of measures to improve the
competitiveness of Vietnam’s textile and garment sector in the context of
Partnership Agreement Trans-Pacific.
4.5.1. For State
4.5.2. For Textile and garment Association, Vietnam Association of Cotton
Yarn
4.5.3. For textile and garment enterprises