...Battle for the textile and apparel industry in Southeast Asia • The reasons for China’s decreasing presence in the industry • Initiatives by the governments in Southeast Asia to boost the textile trade • Vietnam and Bangladesh’s quest to conquer apparel industry and surpass India Textile manufacturing is characterised as a high labour intensive industry and the enterprise has been steering the economic growth in Southeast Asia. The industry is closely linked to the agriculture sector and the raw materials such as cotton and jute, which are easily available, this along with high crop subsidies have supported the growth of textile manufacturing in the region. China has been dominating the industry for more than three decades as far as production...
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...Table of Contents 1. Introduction to the study 2 2. Literature review 2 2.1 Main concepts 2 2.1.1 Foreign direct investment 2 2.1.2 Economic development 3 2.2 Related literature: The role of FDI in economic development 3 2.2.1 The radical view of FDI 3 2.2.2 The positive view of FDI impact 4 2.3 The impact of economic development 5 3. Case of study: the impact of FDI in garment industry and automobile industry in Viet Nam 7 3.1 Overview of FDI in Vietnam 7 3.2 Garment industry 8 3.3 Tourism Industry 9 3.4 Assess the impact of FDI in Vietnamese economic development 10 4. Conclusion 11 References 14 Appendices 17 1. Introduction to the study Foreign direct investment (FDI) is a concept that has emerged in recent decades. It was born with the trend of globalization and become an interesting topic for economic researchers. The evidence is that there are a large number of studies on this field, including case studies in specific country and cross-country analyses, single-dimensional and multi-dimensional studies, examinations in single-sector and multi-sector. However, until now there are still some debates about the issues related to this concept. One of the noticeable discussions is the relationship between foreign direct investment and economic development. This paper, to some extent, will review these studies about the relationship between...
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...This paper seeks to look at Vietnam’s economy, financial sector, and political sector in respect to the textile industry. In an attempt to evaluate the feasibility of entering a foreign market, we focus our paper on a mid-sized company called Augusta Textile Company. This paper seeks to evaluate Vietnam’s potential for investment, particularly in the textile industry. While the company seeks to increase revenues and keep costs of production low, the company must look to expand to growing markets. However, various risks must be taken into consideration, as they can be great barriers to entry. The company looks to expand with the least financial risk, but greatest potential output and revenue. In evaluating the textile industry in Vietnam, as well as potential modes of entry, we may conclude a recommendation for Augusta Textile Industry’s future potential expansion. Introduction Country Basics Vietnam is formally known as the Socialist Republic of Vietnam and is located in the South China Sea. It is the thirteenth most highly populated country in the world (Hossain, 2010). The current population of Vietnam is estimated at about 90.4 million (The Heritage Foundation, n.d.). There are 54 officially recognized ethnic groups in Vietnam, but the majority are Viet (also known as “Kinh”), comprising of about 86% of the total population. Other significant ethnic groups are the Tay, Thai, Muong, Khome, and Hoa. The vast majority of the Vietnamese population speaks the Vietnamese...
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...globally. Export is a product that sold to the global market, while the import is bought from the global market. In most countries, international trade represents an important share of gross domestic product (GDP). One of the Asian economies most open to international trade is Vietnam and it has been currently...
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...BUDGET 2013-14 AND THE INDIAN TEXTILE INDUSTRY AN OVERVIEW The Indian Textiles Industry has an overwhelming presence in the economic life of the country. India employees about 100 million people in various forms related to the textile industry. This number is about 1/3rd of the total population of the United States. Owing to the employment and revenue generation, India has a cabinet level ministry for the textile sector. Textile sector can be broadly categorized into jute, sericulture, wool & woolen, man-made fiber & filament yarn industry. The Indian textiles industry contributes substantially to India’s GDP and exports earnings. The export basket consists of wide range of items containing cotton yarn and fabrics, man-made yarn and fabrics, wool and silk fabrics, made-ups and variety of garments. The major competitors for the Indian textile industry are China, Vietnam, and Bangladesh. USA is the single largest importer of textiles & clothing items. The rupee vis-a-vis dollar movement does have an impact on export of the textile industry. A 100% FDI is allowed in the textile sector under the automatic route. Several international retail brands are planning to invest in Indian textile sector as the Central Government has announced many incentives, including tax exemptions, to the textile and garment industry in the Union Budget 2013-14. According to the textile industry analysts, there will be 5-7 percent increase in foreign direct investment (FDI) with global brands such...
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...Economic Research Macro Commentary THE JAPANESE EARTHQUAKE: ECONOMIC IMPACT ON VIETNAM March 2011 Vietnam Alan T. Pham, PhD Chief Economist I. II. Background On Mar 11, 2011 an earthquake measured at 9.0 on the Richter scale struck the Sendai region in north east Japan. It was followed by a tsunami wave that hit the shore, causing widespread damage and loss of life. At last report, the number of deaths was put at 6,000. Total damages were estimated by insurance companies at more than USD300 bn. This number is sure to increase as a more careful survey of the devastated areas is made by insurance agents. Capturing most of the headlines was a radiation leak at the Fukushima Dai-Ichi nuclear generator. The danger from this source, if any, is said to be limited geographically to Japan. But such news tends to carry an emotional effect, because similar reactors are used in other countries to generate electricity. Analysis 1. Implication for the world economy VinaSecurities Sunwah Tower, 5F 115 Nguyen Hue, District 1, Ho Chi Minh City, Viet Nam T: +848 3827 8278 F: +848 3827 8368 E: sales@vinasecurities.com W: www.vinasecurities.com Bloomberg: VNSC Economic Research Alan Pham, PhD, Chief Economist Nguyen The Cam Hoan, Manager Huynh Phu Sy, Analyst T: +848 3827 8278 F: +848 3827 8368 E: economics@vinasecurities.com The global impact deriving from this disaster is likely to be limited. ...
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...Indonesia shifted their investment from business to manufacturing, textile and garment industry was one of their focus, now 90% of the Indonesian textile and garments industry are run by the ethnic Chinese in Indonesia. This paper intends to probe the Indonesia’s textile and garment industry entitled “Analysis on Indonesia’s Textile and Garment industry: Current Situation, challenges, Government’s Policies and Prospects”. The paper is divided into three parts: 1, Profile of Indonesian Textile and Garment industry; 2, the reasons why Indonesian textile and garment industry facing difficulties; and 3, Indonesia government’s policies towards textile industry and prospects. Textile and Garment industry is one of the most significant sectors that give directly Contribution to the economic growth in Indonesia. The Textile and Garment industry is not only absorbing many workers but also giving the biggest foreign exchange compared with other sectors. According to the data from Department of Industry and Trade that the number of textile and Garment industry in Indonesia was about 88 companies in 1987, and over 2000 in 1992, in 2003, it reached to 2654.the geographical distribution of the Indonesian textile industry is highly concentrated on the island of Java, and in particular in West Java. Almost 90% of the textile industry is located in Java, and 54.8% are concentrated in West Java alone. For the garment industry, high Concentration is to be found in West Java, Jakarta and...
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...How can Transaction Cost Economics Theory be used to help Bangladesh's Government save their Garment Industry? Daryl Chen California Baptist University Abstract Bangladesh is one of the developing countries of the South Asian region, with the population near about 122 million. The country's main export sector is in the garment industry. In 2010, the country decided to raise the minimum wage due to the public's outcry of unfair wages and working conditions. In this research paper, we will look at how the increase of minimum wage has affected the country's economy and what could be done to improve the outcome. Introduction Bangladesh is one of the developing countries of the South Asian region, with the population near about 122 million. Many of the 122 million are garment factory workers whose incomes rely on the garment industry growth and the ability to offer cheaper costs than other countries in the world. Bangladesh is a developing country, which would be consider by most as an old terminology, a third world country, and it's Ready Made Garments (RMG) sector of the textile industry has been known as the biggest earner as an export and the foreign currencies that come as the result of it. The country's Gross Domestic Product (GDP) is greatly contributed by its textile industry. In 2010, the country raised the minimum wage. The fallout was the unforeseen result and halted the country's growing economy. The country's export...
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...Revised and Final Draft January 2015 Not to be quoted Strategy for Export Diversification 2015-2020 Breaking into new markets with new products Dr. Zaidi Sattar Policy Research Institute of Bangladesh Prepared as a Background paper for the Seventh Five Year Plan 1 Table of Contents List of Tables .............................................................................................................................ii List of Figures ...........................................................................................................................ii List of Boxes .............................................................................................................................iii Acronyms .................................................................................................................................. iv I. INTRODUCTION ................................................................................................................ 1 II. CHALLENGE OF EXPORT DIVERSIFICATION ....................................................... 1 III. EXPORT PERFORMANCE AND PROGRESS OR LACK IN DIVERSIFICATION .................................................................................................... 3 Exploiting Non-traditional Markets for Exports ............................................................................... 14 IV. INTERNATIONAL EXPERIENCE AND LESSONS LEARNT ............................... 18 V. CONSTRAINTS TO EXPORT DIVERSIFICATION...
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...Vietnam Protectionism question Vietnam has an estimated 90.3 million inhabitants. It is the world's 13th-most-populous country, and the eighth-most-populous Asian country as of 2012. It is a one party communist state that has been one of south east asias fastest growing economies and has its sights on becoming a developed nation by 2020. It became a unified country in 1975 when the armed forces of the communist north seized the south. The country experienced 3 decades of bitter wars in which the communists first fought against the colonial power France, then against South Vietnam and its US backers. A visit to Vietnam by US president Bill Clinton in 2000 was the culmination of American efforts to normalize relations with the former enemy. In 1986 the Doi Moi resulted in Vietnams sucessful transition to a socialist orientated market economy. Elements of market forces and private enterprises were introduced soon after and a stock exchange opened in 2000. In 2007 Its successful economic reforms resulted in it joining the World Trade Organization which has promoted more competitive, export-driven industries, It also became an official negotiating partner in the Trans-Pacific Partnership trade agreement in 2010. These lifts in protectionism has meant that poverty has declined significantly however, Vietnam is still working to create jobs to meet the challenge of a labor force that is growing by more than one million people every year. It also still suffers from relatively high...
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...of economic growth and employment generation but this approach has not worked. The Ready-Made Garments (RMG) industry occupies a unique position in the Bangladesh economy. Bangladesh has a total population of over160 million. Among of vast population about 3.5 million people are working in the garments industries. It is the largest exporting industry in Bangladesh, which experienced phenomenal growth during the last 20 years under the quota system of Multi-Fiber Arrangement (MFA). The abolition of quota system thus brings new challenges for Bangladesh’s apparel industry to continue its current status and enhance it in a free flow of apparel trade era. According to BGMEA, after the Liberation War of Bangladesh, in 1983 the Ready-Made-Garment (RMG) industry emerged to be a most promising sector in the socio-economic context of Bangladesh. From that point of time till now, this industry has grown and developed so rapidly that currently Bangladesh is exporting RMG products worth 5 billion USD every year to countries like EU, USA, Canada and other countries of the world. Now, Bangladesh enjoys the position of being the 6th largest apparel supplier to the USA and EU countries. The sector rapidly attained high importance in terms of employment, foreign exchange earnings and its contribution to GDP. Background of RMG industry in Bangladesh since beginning of ‘80s Export-oriented garment exports from Bangladesh were initiated in the beginning of the 1980s (Bhattacharya and Rahman...
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...Section B: Welspun India Industry Analysis – Textile Industry on Global Scale The global apparel and fashion trade is expected to grow to USD1 trillion by 2020. However with growth slowing down in developed markets, the dynamics of the global fashion market are expected to change dramatically. Emerging economies will fuel most of the growth in the fashion market. Brazil, Russian, India & China (BRIC) along with few other South-East Asian countries are seen as the major growth drivers. In addition to this, global apparel markets in the recent past have shown a paradigm shift, moving towards increased product differentiation, and catering to a diverse, aware, and demanding customer base. Retailers have thus gravitated toward demographic shifts, societal influences, economic influence, and environmental concerns. With growth in developed economics cooling, retailers are facing pressure due to restricted consumer spending. Under such conditions the global apparel value chain has shown a distinct shift both at the front- and supply-end. Recent Global Trends in Textile Sector * Increase in textiles and clothing global trade from US$ 355 billion in 2000 to US$ 602 billion in 2010 * Expected to reach US$ 1 trillion by 2020, CAGR of 5% pa. * China, India, Pakistan, Bangladesh, Thailand, Indonesia are leading suppliers and further expanding their capacities. * Established markets (North America, Western Europe) continue to show traction * Emerging markets...
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...1.0 Introduction FDI refers to is a direct investment into production or business in a country by an individual or company of another country, either by buying a company in the target country or by expanding operations of an existing business in the country. Foreign Direct Investment which is a passive investment which is passive investment in the securities of another country as stock and bonds. Foreign direct investment occurs when a firm invests directly in facilities to produce and /or market a product in a foreign country.FDI plays a dominant role in the economics of Bangladesh through accelerating Gross Domestic Product(GDP),export and domestic investment followed by overall economic growth. The objective of this term paper is to find out the major effect of FDI on industrial productivity of Bangladesh. Foreign direct investment (FDI) enables a capital poor country like Bangladesh to build up capital, avoid threat to unemployment develop productive capacity. Conventional wisdoms have it that firms with foreign equity tend to be more productive. This could be due to the firm specific tangible assets such as exclusive technology and product designs, or the intangible know-how embodied in foreign equity such as marketing, networking and sourcing. Such assets may be more readily available in big multinational corporations (MNC). As such, being part of MNCs allow the local subsidiaries with foreign equity to gain access to these assets...
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...PERFORMANCE OF TEXTILE INDUSTRY IN INDUSTRIALISATION: A STUDY WITH REFERENCE TO INDIA INTRODUCTION Prosperity of any nation is extremely difficult without industrial development – is a well established truth for all the economies – developing or developed. Economic development and industrialization have became so closely integrated with each other that progress of an economy is now accessed from the success it has achieved in transformation from agricultural set up into a industrial set up. Through industrialization a situation is created whereby many industries are set up rapidly and ultimately backward areas are converted into economically developed areas and backward economies into developed economies. Industrialization, infact is a composite term which involves a number of structural changes such as changes in the production techniques, factor intensities, industrial employment and output. Industrialization is not only a way to increase output or national income but is a means of introducing modern technology and changing ways of life and finally the structure of the economy because of its self-reinforcing quality. But the all above cannot be executed without a well planned industrial policy. The industrial polity provides direction to the pace of industrialization and industrial development. Hence, to industrialize the country, India too, framed industrial policy which was amended, modified and reoriented several times. The First Industrial Policy was framed in 1948...
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...School of Commerce and Management Southern Cross University INTERNAL ASSIGNMENT COVER SHEET |Student ID: 21875658 |Student Name: Chew Yini | |Batch No : BIBD5 1119A |Unit Name: International Economics & Trade | |Assignment No: 1 (week 7) |Tutor Name: Chi Ching | |Word count: 1003 |Assignment Due Date: 2 December 2011 | Unless otherwise specified, assignments must comply with the following requirements. Assignments that do not comply with the following may not be marked. Please confirm that your assignment meets these requirements by ticking each of the following boxes before submission: ❑ Assignment is word-processed using 11 or 12 point font ❑ Left-side margin is at least 3 centimeters ❑ Assignment is 1.5 or double spaced ❑ All pages are numbered and include your Student ID and Name ❑ A Bibliography or Reference List is included at the end of the assignment ❑ References have been correctly noted ❑ All works consulted have been cited using an appropriate referencing style ❑ A duplicate copy of the assignment has been retained by the student ❑ Where appropriate, an approval for extension is attached ❑ The below declaration has been read, signed and dated ...
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