Introduction to Vietnam''''s furniture industry in recent years: Although affected by the Covid-19 epidemic, the Vietnamese furniture market is still witnessing quite impressive growth.. Cu
Trang 1CHAPTER 1: OVERVIEW OF THE CIRCUMSTANCE
1.1 Introduction to Vietnam's furniture industry in recent years:
Although affected by the Covid-19 epidemic, the Vietnamese furniture market is still witnessing quite impressive growth
The furniture industry is divided as follows:
According to style and use, there are living room furniture, kitchen furniture, bedroom furniture
According to materials: mainly wood, rattan, bamboo, iron
Currently The furniture industry, especially wood, is showing very optimistic signs of growth Thanks to free trade agreements (FTAs): EVFTA, CPTPP have brought export tax rates close to 0%, so export activities have developed In addition, production and trade activities between China's border gates are being restricted to fight the epidemic, so foreign companies are shifting factories or orders to Southeast Asian countries, including Vietnam
as an alternative This gives domestic businesses the opportunity to expand their markets in Europe or the US
In addition, Vietnamese businesses must always change designs and styles, and apply technological advances to increase product quality and minimize costs incurred
* Vietnam's main export markets:
Main export market of Vietnam's wooden furniture industry in 2021 Based on the chart, it can be seen that the US is Vietnam's largest import market in 2021 In that year , Vietnam exported more than 8.773 billion USD to the US market This helps Vietnam become the largest supplier to the United States for 2 consecutive years The main
products exported to the United States are: bent wooden furniture, combined wooden furniture
The second largest market is China In 2021, export turnover will reach 1.496 billion USD The main exported products are: natural wood groups 1,2,3; Fine art wooden
furniture
Trang 2Next are Japan, Korea, England and other markets (https://topnoithat.com/kim-ngach-xuat-nhap-khau-do-go-noi-that-cua-viet-nam-2021/)
* Furniture industry export turnover in 2021:
Based on data, we see that the furniture industry, especially the wood industry, has developed extremely dynamically over the past 10 years Vietnam has risen to become the 7th largest furniture manufacturing country in the world In 2021, export of wood and wood products is one of eight products with export turnover reaching over 10 billion USD
And export turnover has increased fourfold in the past 10 years Specifically, in 2010, export turnover reached 3.44 billion USD, and by 2021 it will reach 14.12 billion USD This
is a very impressive number.
1.2 Current situation of the US.
1.2.1 Current economy of the US:
* In 2023:
In 2023, the US economy surprised experts when in the fourth quarter of 2023, US GDP increased by 3.3 % over the same period last year thanks to the strong consumption
of the American people To summarize, in 2023, the US economy will grow by 2.5%
Trang 3Figure 1.4: Annual economic growth rate of the US over the quarters - Source: CNBC.
This increase is thanks to personal consumption - the main driving force to boost the country's economy, with growth in the fourth quarter of 2.8% There is also the real estate sector and investment from businesses that also impact this growth
Contrary to experts' speculation that the US will suffer a recession in 2023 because the US Federal Reserve (Fed) has sharply raised interest rates to restrain inflation and cope with the economic shock energy price shock, the world's largest economy will still be very vibrant in 2023 with a low unemployment rate and American people still spending very heavily
* First quarter of 2024:
The US economy ended the first quarter of 2024 with very positive figures:
First is the unemployment rate: according to the US Department of Labor Report published on January 5 April 2023 has decreased from 3.9% in February 2024 to 3.8% in March 2024 The rate below 4% has been maintained for 26 consecutive months This is a sign that the US economy is outperforming other countries in the world even though the US Federal Reserve has raised interest rates from March 2022
Second, the number of jobs has grown on a large scale, including the fields of health, government, entertainment, hotels, construction and other services At the same time, average earnings per hour worked also increased by 0.3% in March Wages also increased by 4.1% over the same period last year
Trang 4Figure 1.5: Monthly job creation in the US from January 2022 to March 2024.
The above data shows that the US economy in 2023 up to now is very positive ( https://sctv.vn/kinh-te/dau-tu-tai-chinh/kinh-te-my-quy-i-2024-nen-tang-vung-chac-tu-so-lieu-viec-lam.html)
1.2.2 Situation of the furniture manufacturing industry in the US in recent years:
The value of the furniture industry in the US is estimated by experts to be about 34.8 billion USD And today, consumers in the US are increasingly looking towards
environmentally friendly products and consumer lifestyles are gradually changing and this has contributed to the growth of the furniture industry in the U.S.A Companies in this industry in the US are trying to carry out activities to develop their business such as
merging, buying and selling with other companies or constantly changing products to suit consumer tastes
However, the furniture industry in the United States is still facing a number of
challenges such as: rising raw material costs, changes in consumer expectations and trends, and shortage of skilled labor Highly skilled
Nowadays, Ready to Assemble (RTA - Ready to Assemble) wooden products are becoming increasingly popular, especially during the ongoing Covid 19 epidemic Due to regulations on travel restrictions or social distancing, product assembly will be done by consumers themselves, not at the factory This makes the product price cheaper and helps manufacturers optimize shipping costs
Trends in the furniture industry in the US:
Bedroom furniture is increasingly popular: housing area has decreased significantly due to falling real estate prices Therefore, consumers always want products to be
compactly designed to optimize space and be easy to move
Consumers are increasingly more comfortable spending on furniture products: Americans are aiming for a more premium product because they have more money and their living standards are improving Spending by Americans has increased from 355 USD
in 2010 to 715.6 USD in 2021 The American furniture industry will experience growth in sales in the following years
Trang 51.3 Vietnam - America trade relations:
After a long resistance war of 20 years against the US to save the country, Vietnam gained independence, unified its territory and forced the US army to withdraw back home During the next 20 years from 1975 to 1995, the relationship between the two countries became extremely tense The US government through generations of presidents has relied
on its power to impose sanctions such as embargoes, economic and political blockades with the purpose of weakening Vietnam's economy and political institutions
However, according to the motto "closing the past, looking forward to the future", on February 3, 1994, current US President Bill Clinton announced that he would lift the
embargo on Vietnam and in September In July 1995, the US and Vietnam officially
established diplomatic relations; opens a new chapter for comprehensive development in many aspects between the two countries
Figure 1.6: Image of President Bill Clinton announcing the lifting of the trade embargo with Vietnam.
Figure 1.7: Image of the US - Vietnam cooperative relationship.
Below are memorable milestones in cooperation, especially in trade, between the US and Vietnam:
- 1995: on August 6 - US Secretary of State Warren Christopher visited Hanoi and officially opened the mutual embassies between the two countries
- 1997: Vietnam and the US signed a Copyright Agreement on June 27 Also that year, in August the US allowed the US Agency for International Development (USAID) to support Vietnam Improve trade through technical assistance programs on trade law and trade policy - Year 1998: March 26 - Minister of Planning and Investment Tran Xuan Gia and Ambassador Pete Peterson signed the OPIC Bilateral Agreement
- 1999: Export-Import Bank (Ex-Im Bank) and the State Bank of Vietnam completed framework agreements, paving the way for Ex-Im Bank to operate in Vietnam
- 2000: Minister of Commerce Vu Khoan and US Trade Representative Barshefsky signed a bilateral trade agreement on July 13
Trang 6- 2001: The US-Vietnam Bilateral Trade Agreement was signed in Washington between Deputy Prime Minister Nguyen Tan Dung, Minister of Trade Vu Khoan with Trade Representative Robert Zoellick
- 2003: Vietnam Textile and Garment Agreement was signed in Hanoi on July 17
- 2007: Vietnam officially joined the World Trade Organization (WTO) on January
11 January 15 3, Vietnam and the US have signed a Bilateral Maritime Agreement
- 2013: President Truong Tan Sang paid an official visit to the United States and the two countries established a comprehensive partnership in July
- 2023: in April; US Secretary of State Antony Blinken visited Vietnam and started construction of the US Embassy in Hanoi In September, the United States - Vietnam officially upgraded to a Comprehensive Strategic Partnership
Through the above events, we can see that the relationship between the United States and Vietnam is becoming stronger and stronger economically, politically, and
socially
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