South Korean textile and garment producers should shift their investment to Southeast Asian countries like Vietnam as China is no longer a good investment destination for the Korean textile industry, advised the Korea Trade-Investment Promotion Agency (KOTRA).
The report released Tuesday by KOTRA emphasized changes in the Vietnamese textile industry’s business investment after the country’s WTO entry, stressing South Korean enterprises should inject their capital in this field.
Vietnam’s apparel industry will appeal to foreign investors with its cheaper labor costs compared with China, skilled workforce and various incentives for foreign investors, KOTRA noted.
Big changes will be seen in the Vietnamese textile industry after the country’s WTO entry, and its textile export will surge after the removal of the US import quota system. Complaints about dumping by WTO members will decline, the report stressed.
Vietnam has been considered as an alternative investment destination since China’s investment environment has been deteriorating, and Korean companies have been raising their investment in Vietnam, the report said.
Last year, Korean apparel companies shrank their investment by 10 per cent in China while increased by 54 per cent in Vietnam. That's made Vietnam the second-largest investment destination for the Korean textile industry, after China.
Six Vietnamese textile companies invested by Korean enterprises are added to the list of top 20 textile exporters in Vietnam, the KOTRA report said, adding it is not an exaggeration at all to say that the fate of the two textile industries are closely tied together.
Last year, South Korean investors injected US$2.7 billion in Vietnam, ranking the second among countries and territories investing in the ASEAN country, accounting for over 34 per cent of its total foreign direct investment (FDI). (VietnamNet, english.chosun.com)
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