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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 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 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 ? 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 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 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 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 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: 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 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 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 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 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 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 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 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 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 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 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 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 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 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 " 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." 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 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 11 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 levels: Level 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 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 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 factors are the State and investment foreign In 12 addition to 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 13 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 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 labor productivity of textile industry 1.5 labor productivity garment industry 0.5 textile labor productivity 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 17 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 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 18 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 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 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 19 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 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 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 20 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 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 years can go into production so projects planned implementation is often slow start or not feasible Many businesses, especially small businesses, or both, 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 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 21 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 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 22 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 23 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 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 24 CONCLUDE TPP was signed will create a lot of opportunities and challenges for Vietnam's economy in general and textile and garment sector in particular Our country's textile and garment industry in recent years there has been a strong development, has an important contribution to the socio-economic development The thesis "Improving the competitiveness of textile and garment industry in the context of Vietnam joined the Trans-Pacific partnership", have achieved the purpose: Systematics and develop the theory of competition in general and competitiveness of the textile and garment industry in the context of promoting international economic integration and participation in the TPP The thesis analyzed and pointed out shortcomings and limitations of previous research results related to the field of competitiveness of textile and garment industry, from which the author has found visible gaps, the existed problems, the problems that has not been studied in the competitiveness of Vietnam's textile and garment sector The thesis has clarified the nature of competition, competitiveness, the factors affecting competitiveness, the criteria for evaluating industry competitiveness On the basis of cognitive reasoning problems, especially economic content and evaluated methodology the competitiveness of textile industry The thesis has clarified the ability, the competitiveness of Vietnam's garment sector to join the TPP Applying the improved model of Dunning to present content and analyze the combined effects of these factors in order to assess the competitiveness of textile sector to join the TPP, the new generation FTA Based on the analysis and assessment of the state of competitiveness of textile and garment industry of Vietnam, the thesis has proposed the major solutions to improve the competitiveness of textile and garment industry to participate the new generation FTA LIST OF SCIENTIFIC WORKS PUBLISHED BY AUTHOR Nguyen Hong Chinh (2016), "Improving the competitiveness of Vietnam's garment sector joining TPP through the experience of some countries", Journal of Information and Economic forecasts - society No 130, May 10/2016 Hoang Van Hai, Nguyen Hong Chinh (2016), "Improving the competitiveness of Vietnam's garment sector joining Partnership Agreement Trans-Pacific", Workshop, University of Pacific Nguyen Hong Chinh, Nguyen Thi Que (2016), "Analysis of factors affecting investment in Nghe An province towards sustainability in the context of the FTA to the Trans-Pacific Partnership." National Workshop - National Economic University Nguyen Hong Chinh (2016), "Analysis of the comparative advantages of Vietnam's garment sector to join TPP", Journal of Information and Economic forecasts - society 126, May 06/2016 Nguyen Hong Chinh, Tran Thi Dung (2015), "The impact of the Free Trade Agreement (FTA), the new generation's merchandise exports to Vietnam", Journal of Science and Technology No 29, 08/2015 Nguyen Hong Chinh (2015), "Strategic Solutions improve competitiveness for Vietnam's garment sector to join TPP", Journal of Information and Economic forecasts - society No 117, May 09/2015 Subject (2014), "Research opportunities and challenges of free trade agreements Vietnam-EU bilateral trade with Vietnam's international" Members topic Scientific topics Ministry of Industry and Trade; Code: 63.14RD / HD-S & T Tran Van Tung, Nguyen Hong Chinh (2013), "The impact of foreign investment for technology development in East Asia", Journal of Information and socio-economic forecasts No 95/2013 Tr3-10 ... Vietnam 13 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... 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,... 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