TOPIC EXPORTING VIETNAM’S FOOTWEAR TO OTHER COUNTRIES

The situation of footwear production and export in China and in the 18worldCHAPTER II: Situation of footwear export market in Vietnam 23 2.2.1.. Lefaso Vietnam Leather, Footwear and Hand

NATIONAL ECONOMICS UNIVERSITY SCHOOL OF TRADE AND INTERNATIONAL ECONOMICS

GROUP ASSIGNMENT

TOPIC: EXPORTING VIETNAM’S FOOTWEAR TO

Nguyễn Nam Long (ID: 11183079)Email : ledinhminhmh@gmail.com

Student Tel : 0388785117Major : International EconomicsClass : International Economics 60 AType of Education : AEP

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I assure you that this exercise is completely done by my group ( Lê Đình Minh and Nguyễn Nam Long) The citations and materials used in this exercise are completely honest, cited and ensure the highest accuracy to the best of our

knowledge If these stated above are not true, we assume full responsibility for our exercise

Hanoi, 04/02/2020Students: Lê Đình Minh

Nguyễn Nam Long

First of all, I would like to express my deep thanks to NEU lectures and lecturesfrom School of Trade and International Economics for teaching and imparting to

us the knowledge and valuable experience

I want specially thank to Assoc.Prof.PhD Nguyen Thuong Lang, who was a constant source of inspiration throughtout the study as his insights provided us opportunity to explore varied perspectives During the course of work, we have accumulated useful knowledge and learned the spirit of effective and

professional type of working These are very essential for us in the learning process and in the working environment in the future

Finally, I would also take this opportunity to thank my friends and my family for their support all through the research period, wherever necessary

Hanoi, 04/02/2020Students: Lê Đình Minh

Nguyễn Nam Long

2.1 The situation of footwear production and export in China and in the 18world

CHAPTER II: Situation of footwear export market in Vietnam 23

2.2.1 Difficulties of Vietnam’s footwear market 272.2.2 Incentive policies of the Vietnamese Government 28

TABLE OF ABBREVIATIONS

EVFTA Europe-Vietnam Free Trade Agreement

EAEUFTA Europe-Asia Economic Union Free Trade Agreement

Lefaso Vietnam Leather, Footwear and Handbag Association

CPTPP Comprehensive and Progressive Agreement for

Trans-Pacific Partnership

LIST OF TABLES AND GRAPHS

Table 1 17 Struture of The Import and Export Department

Table 2 18 Share of the world footwear by continent (2010-2015) Table 3 18 Top 10 largest footwear exporting countries in the world

(2010-2015) Table 4 22 Some indicators of Vietnam’s economy

Table 5 25 Top 10 footwear producers (Quantity) 2017

Table 7 29 Imported value of raw materials

Table 8 40 Plan of footwear industry to 2030

Graph 1 19 Global footwear market growth 2010-2015

Graph 2 19 Top 10 countries has the largest footwear export

turnover in the period 2012-2015 Graph 3 23 Vietnam’s economic growth rate 2015-2019

Graph 4 26 Export of footwear and bags from 2015-2017

Graph 5 27 Export market of the whole industry in 2017

Graph 6 35 Development trend of the supporting industry

INTRODUCTION

1 Rationate

In the context of international economic integration, Vietnam has obtained

significant achievements in exporting activities Many products have become key exports, including footwear Now Vietnam is one of the four largest footwear

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manufacturers in the world, after China, India and Brazil; and the second biggest footwear exporter, just after China Vietnams footwear products have been

exported to over 50 countries and territories worldwide

Vietnam is currently the 3rd largest footwear producer in Asia after China, India, and 4th in the world Vietnam currently produces about 920 million pairs of shoes

a year, exporting more than 800 million pairs to more than 50 markets around the world, of which the European Union (EU) accounts for the largest proportion

According to the General Statistics Office, in the first 10 months of 2019,

exports of footwear and bags and umbrellas brought in US $ 17.67 billion, up 11.5% over the same period, of which footwear reached 14, 06 billion USD; handbags reached 3,070 billion USD With the implementation of about US $1.35 billion / month of footwear, US $ 300-350 million / month of bags and year-over-year orders that have been completed, the export of this sector is likely to reach 21.7-21.8 billion USD in 2019, exceeding the set target of 21.5 billion USD

Currently, Vietnam is ranked second (behind China) in terms of footwear export volume to the world market with more than 1 billion pairs of shoes each year Notably, the average export price of the world is 9.81 USD / pair, while

Vietnam's price is 15 USD / pair, 1.6 times higher than the world average price Thus, the quality of Vietnam's footwear products has been improved and

recorded

The trade war between the US and China is increasing, beginning to affect

Vietnam's exports and imports Promote FDI investment in footwear sector

increased in 2018 - 2019, avoiding the impact of the US-China trade war and

anticipating effective FTAs in 2019 Therefore, footwear exports of 2019

continue to increase thanks to the increase of FDI export

China now ranks first in manufacturing and exporting footwear in the world As China's labor costs are high, multinational corporations tend to relocate their factories to neighboring countries to save costs while still finding materials Vietnam is an alternative destination in this problem In addition, many free trade agreements (FTAs), which have been signed with the Eurasian Economic Union, Korea, EU, CPTPP, etc., are also opening opportunities for Vietnam's footwear exports Although Vietnam's labor costs are increasing but still lower than China and Thailand, the opportunity for big brands to pay attention to the Vietnamese market and Vietnamese enterprises is huge

With these positive results and positive signs, Lefaso( Vietnam Leather, Footwear and Handbag Association) predicts that demand for footwear products in

Vietnam's main export markets will continue to increase in 2020 According to international experts, from 2020, the risk of confrontation with US-China trade, between the US and other trading partners in Europe and India will gradually decrease and the global economy will gradually recover Footwear processing orders continue the trend of moving from China to Vietnam to take advantage of preferential tariffs from FTA agreements, replacing China's export decline Along with that, the FDI sector continues to invest in new and expanded production, which will help the footwear industry maintain export growth Lefaso predicts that

by 2020, the average industrial production index of the leather and footwear industry will increase by 11%, the localization rate of products will reach 60%, export turnover will reach US $ 24 billion, and maintain the growth rate of 10 % compared to 2019

Facing opportunities with the difficulties of the footwear export market, the topic

2 Literature review

2.1 TẠP CHÍ PHÁT TRIỂN KH & CN, TẬP 20, SỐ Q2 – 2017

Abstract: This research identifies industries Vietnamese goods have a

comparative advantage based only comparative advantage index number (RCA – Revealed Comparative Advantage), photo elements affect growth and export trends From the analytical results, the research put issue policy recommendations

to promote benefits Vietnam's position in trade relations with ASEAN

2.2 LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH ‘GIẢI PHÁP THÚC ĐẨY XUẤT KHẨU HÀNG HÓA VIỆT NAM SANG ẤN ĐỘ’-Đàm Hải Vân,

VIỆN HÀN LÂM KHOA HỌC XÃ HỘI VIỆT NAM HỌC VIỆN KHOA

HỌC XÃ HỘI

Abstract: Analyze and assess the current situation of Vietnam's exports to India and the impact factors, thereby proposing a number of scientific and practical solutions to boost Vietnam's export of goods to India.The thesis provides

practical theoretical issues in applying the theory of export in general and the export activities of Vietnamese enterprises to India in particular to thereby

improve the efficiency in operations Export of Vietnamese enterprises to India

in the following years

2.3 Nâng cao năng lực cạnh tranh sản phẩm da giày xuất khẩu của Việt Nam:Nội dung và các nhân tố ảnh hưởng-TS NGUYỄN THỊ PHƯỢNG (Khoa Quảntrị kinh doanh - Trường Đại học Kinh tế Kỹ thuật Công nghiệp)

Abstract: The article mentions the enhancement of competitiveness of Vietnam's exported footwear products The content of the article consists of 3 parts: (1) Introduction; (2) The content of evaluating the competitive advantage of

Vietnam's exported footwear products; (3) Factors affecting the competitiveness

of Vietnam's exported footwear products

2.4 LUẬN ÁN TIẾN SĨ KINH TẾ’THÚC ĐẨY XUẤT KHẨU VÀO THỊ

TRƯỜNG EU CỦA CÁC DOANH NGHIỆP GIẦY DÉP TRÊN ĐỊA BÀN HÀ NỘI’-DƯƠNG VĂN HÙNG-TRƯỜNG ĐẠI HỌC KINH TẾ QUỐC DÂN

Abstract: On the basis of analyzing the actual export situation of footwear

enterprises in Hanoi, applying the theory of promoting exports, proposing

directions and solutions to boost exports to the EU market of footwear

enterprises in Hanoi

2.5 STUDY ON THE PERFORMANCE OF EXPORTING LEATHER

FOOTWEAR SMEs IN INDIA - BIANKA RAY CHAUDHURY

-DEPARTMENT OF BUSINESS ADMINISTRATION FACULTY OF

MANAGEMENT STUDIES & RESEARCH ALIGARH MUSLIM

UNIVERSITYALIGARH-202002 (INDIA)

Abstract: The present research study attempts to contribute by examining the performance of the exporting SME leather footwear units with respect to their specific demography, internal environment and external environment in which they operate and despite these factors significantly affect the export performance

at large It is hoped that the findings of this study would provide an insight to the areas where the exporting firms should immediately upgrade themselves and also

the capacities where the government should intervene and act in order to bring a marked difference in the export performance in the leather footwear sector.

2.6 Nghiên cứu giải pháp phát triển Công nghiệp hỗ trợ ngành Dệt may - Da

giày của Việt Nam trong bối cảnh mới.-Vũ Thị Đào- Thông tin Công Thương.

Abstract: The thesis analyzed clearly the new context affecting the development

of supporting industry of textile and footwear industry, which is economic and social development associated with the environment, opportunities and

challenges created by FTAs, the impact of the industrial revolution 4.0 The proposed solutions are built on the basis of analyzing the current situation of development of supporting industry of textile and footwear industry, focusing on analyzing the shortcomings (including policy), then proposing solutions to

remove overcome difficulties for SI in the textile and footwear industry This contributes to helping state management agencies devise development strategies and policies that are appropriate to reality

2.7 Đánh giá hoạt động xuất khẩu Việt Nam giai đoạn 2010-2014- Dương Thị Thanh Mai-Ths Trường Đại học Lâm nghiệp

Abstract: The study goes into analyzing the current situation of Vietnamese goodsexport in the period of 2010-2014, based on the factors of scale, export growth rate, structure of export goods and export markets The study pointed out the successes and limitations of Vietnam's goods export activities as well as the opportunities and challenges for Vietnam's exports On that basis, proposed some basic solutions to boost Vietnam's export in the future

2.8 XUẤT KHẨU GIÀY DÉP CỦA VIỆT NAM VÀ MỘT SỐ KHUYẾN

NGHỊ- Vũ Thị Hạnh (http://tapchi.ftu.edu.vn)

Abstract : The article analyzes Vietnam's export activities in the context of the world market with much competition from major competitors from EU countries and especially the important role of China in spending coordinate the world's footwear production The paper uses statistical research methodology,

synthesizing data from the General Department of Vietnam Customs to evaluate factors affecting the country's footwear export Vietnam's footwear export

turnover increased in 2016 and is expected to increase in 2017 Countries such as Taiwan, the US, South Korea and Hong Kong are among the top 10 countries with large footwear import turnover Most from Vietnam in 2016 but 9 out of 10 enterprises with the largest footwear export turnover of Vietnam in this year are FDI enterprises from Taiwan

2.9 Báo cáo nghiên cứu Thị trường hàng giày dép New Zealand -Nguồn:

Thương vụ New Zealand Tài liệu tham khảo: Số liệu thông kê - Cục Thống kê New Zealand; Các báo cáo của Cơ quan dịch vụ thương mại Mỹ…

Abstract : An overview of the New Zealand footwear market over the years The unilateral tax reduction program is one of the subsequent routes of economic reforms since the 1980s in New Zealand with the main objective of creating greater efficiency in industries by creating a more competitive environment from opening markets, reducing import taxes, and giving local producers access to raw materials and imported components

3 Aims and tasks of the research.

3.1 Aims of the research

On the basis of analyzing the situation, assessing the results as well as the

restrictions of Vietnam’s footwear export market to other countries in the period

of 2015-2019, thereby proposing orientations and solutions to expand Vietnam’s footwear export market in 2020 and vision to 2030

3.2 Tasks of the research

To achieve the research aims, the topic needs to perform the following tasks:

1, Introduce about the research basis

2, Analysis the situation of Vietnam’s footwear market to othercountries in the period of 2015-2019

3, Point out assessments and achieved results as well as the restrictions

4 Subjects and Scope of study.

4.1 Subject : Vietnam’s footwear export market

4.2 Scope of study: Export Vietnam’s footwear to other countries and

6 Structure of research topic.

In addition to the Introduction, the Conclusion, the table of contents and theReferences, the topic consist of 4 main parts:

Chapter 1: Basis, experience and lessons for Vietnam about exporting.

Chapter 2: Situation of footwear export market, in Vietnam.

Chapter 3: Oppotunities and challenges.

Chapter 4: Orientation and Solutions for the future.

1.1 Position and function.

* The Import and Export Department is an organization under the Ministry ofIndustry and Trade, performing the function of advising and assisting the Minister ofIndustry and Trade in state management and organizing law enforcement in the field ofoperation, export and import of goods, origin of goods, purchase and sale of internationalgoods, agents of purchase, sale, processing and transit of goods with foreign countries,under the state management of the Ministry of Industry and Trade

* The Import and Export Department has the legal entity, its own seal andaccount according to the provisions of law, operation funding is provided by the statebudget and from charges and fees collected in accordance with the State regulations

The Import and Export Department has an international transaction name in

English: Agency of Foreign Trade

Abbreviated name: AFT

Head office in Hanoi city

In addition, The Import and Export Department also performs other duties and power as required by The Ministry of Industry and Trade

1.2 Organizational structure

OfficeGeneral Policy DepartmentDepartment of OriginImport and Export Department of IndustrialHelping Department of the Products

Director Import and Export Department of

Agicultre-Forestry-FisheriesInternational marketing departmentDepartment of Trade facilitationHanoi Export-Import Management Department

Regional Import-Export

Management Offices under the

Import and Export Department

Ho Chi Minh City Department of Import Management

Export-Hai Phong Regional Export-ImportManagement Department

Da Nang Export-Import ManagementDepartment

Lang Son regional Export-Import ManagementDepartment

Quang Ninh Export-Import ManagementDepartment

Lao Cai Regional Export-Import ManagementDepartment

Thanh Hoa Export-Import ManagementDepartment

Thai Binh Export-Import ManagementDepartment

Department of Export-Import Management inNinh Binh area

Department of Export-Import Management inBinh Tri Thien area

Import-Export Management Department inKhanh Hoa area

Import-Export Management Department in HaTinh area

Department of Export-Import Management ofHai Duong area

Dong Nai Import-Export ManagementDepartment

Department of Export-Import Management ofBinh Duong area

Export-Import Management Department of

Vung Tau areaDepartment of Export-Import Management ofCan Tho area

Tien Giang Regional Export-ImportManagement Department

Table 1: Structure of The Import and Export Department

Source: Ministry of Industry and Trade of the Socialist Republic of Vietnam

2 Experiences and lessons for Vietnam

2.1 The situation of footwear production and export in the world and China

Table 2: Share of the world footwear by continent (2010-2015)

Table 3: Top 10 largest footwear exporting countries in the world (2010-2015)

Source: World footwear yearbook 2011-2016

Graph 1: Global footwear market growth 2010-2015

Graph 2: Top 10 countries has the largest footwear export turnover in the period 2012-2015

The footwear industry in China has long been the number one in the world, with China retaining its dominant position as the world’s largest footwear

manufacturer and biggest footwear exporter in the global market Fierce

international competition has been a general trend in the industry, with an

increasing amount of global manufacturers gravitating towards Southeast Asia as

a preferred destination for manufacturing products, this has reduced the output of products from China’s footwear industry in recent years, but the country is still expected to be the world’s top footwear supplier over the next few years

According to the latest market reports from Euromonitor, total sales from China’s footwear industry reached RMB 370 billion (US$56.7 billion) in 2016, and it is expected that the market will continue to grow at an average annual rate of 7% through 2020 The fastest growing product segment in China’s footwear industry over the last few years was leather shoes Leather shoe output has grown steadily

at an estimated annualized rate of 1.5% over the recent years The growth of China’s footwear industry is also driven by increasing global footwear demand, especially for products like running shoes, boots, wedding shoes, women shoes, and other famous footwear categories China has been the world’s largest

suppliers of all these kinds of footwear products for decades In 2016, China exported $47.2 billion worth of footwear to the global market, representing over 35.5% of the world’s total footwear exports in that year The USA, Germany, France, UK and Italy and major countries in the Middle East are currently the largest exporting markets for China’s footwear products

For future prospects, footwear manufacturers in China are likely to implement omnichannel distribution strategies to improve their competitiveness in the

domestic market, while further reducing the cost and increasing the quality of exported products Some leading Chinese footwear brands also plan to adopt an omnichannel sale strategy for the global market, brick-mortar sales and e-

commerce channels across the globe will also be of top priority

China’s leading position in the global footwear market has also attracted

significant numbers of buyers and traders from all over the world the hope to source the best business deals in the country To help your footwear business stay

at the peak of the industry, BizVibe provides the most effective to source productsand make business deals with the top footwear manufacturers in China The state

of the footwear industry in China is expected to stay promising for the foreseeablefuture

2.2 Experiences and lessons for Vietnam.

The Vietnam Leather and Footwear Association recently collaborated with the Vietnam Leather and Footwear Research Institute to develop a development orientation for the industry in the period 2010-2020, with a vision to 2030 This

is a job In time for the leather and footwear industry in general, each enterprise producing footwear and accessories in the country in particular, has the

opportunity to review and recognize the strengths and weaknesses

Gradually increasing the proportion of domestic raw materials is the first solution given in the development orientation of the industry Because, with the current situation of having to import up to 50% of raw materials for production, the surplus value that the industry earns is not much compared to the annual export turnover To do this, the Vietnam Leather and Footwear Association will provide support for: administrative procedures, ground contact, calling for help from the government, calling for capital support from businesses … for

businesses to build and develop tannery technology

Developing the domestic market is also the best solution for businesses When returning to dominate the domestic market, build brands, develop high-class leather and footwear products … the leather and footwear industry will gradually reduce the percentage of goods processing, build a brand with the international market and Exports in higher market segments, with more

economic value

In addition, market experts in the leather and footwear industry also propose many solutions to enhance the development such as: Care more about the lives of workers so that employees are really attached to the profession; keep abreast of

technology, create form and mound; organize, participate in annual stylist

Export value 162,11 b $ 176,63 b $ 214 b $ 243,48 b $ 263,43b $GDP per capita 2.065,17 $ 2.170,65 $ 2.358 $ 2.540 $ 2.725,833$Unemployment rate(%) 2,31 2,30 2,28 2,19 1,98

Table 4: Some indicators of Vietnam’s economy

Source: worldbbank.org

Customs.gov.vnGso.gov.v

As a result, in terms of GDP growth, although the global economic environment has become more challenging, Vietnam’s economy has remained strong thanks tostrong domestic demand and export-oriented manufacturing

The economy not only achieved high growth rates, but the economic structure continued to shift towards industrialization – modernization The share of GDP

in the agriculture, forestry and fishery sector decreased from 17% in 2015 to 13.96% in 2019, while the share of the service sector increased from 39.73% of

in 2015 to 41.17% in 2018 and 41.64% in 2019; The proportion of the industry

Graph 3: Vietnam’s Econmic growth rate 2015-1019

Investment in the FDI sector has maintained a fairly good growth over the pasttime; in 2019, the total FDI reached 38.02 billion USD, up 7.2% over the sameperiod; maintain a stable proportion of 23.3 – 23.8% in the period 2015 – 2019

Inflation is controlled by well-performing, synchronous monetary, credit and fiscal solutions as well as flexible coordination mechanisms between fiscal and monetary policies The average CPI decreased from 4.74% in 2016 to 3.54% in 2018; in 2019, decreased to 2.79%

Interest rates were maintained stably and gradually, in line with the domestic and foreign economic context

In the period of 2016-2018, in the context of increasing international interest rates(the Fed raised interest rates from December 2015 to December 2018, from nearly 0% to 2.25-2.5%) The State Bank of Vietnam has conducted