Viable alternatives remain in short supply.
In the first two months of 2015, imports of textile materials and leather shoes into Vietnam reached $658.42 million, an increase of 14.4 per cent over 12 months according to a report by the Vietnam Industry and Trade Information Centre (VITIC).
Main import markets remain China, Korea and Taiwan. China is the most lucrative partner, at $232.83 million and accounting for 35.4 per cent of total imports. This figure has increased by 33.16 per cent since the same period last year.
About 50 per cent of textile raw materials in Vietnam are produced locally while the rest comes from abroad. Of that which is sourced from overseas, China accounts for up to 48 per cent, with many businesses looking no further for all of their needs.
For years, firms have been importing materials such as thread, dyes and chemicals from China. The reason for this is the cost of importing raw material from other markets is higher. Some materials imported from China cost only about 25 to 35 per cent of otherwise identical imports from Japan.
Only by finding domestic sources for raw materials can the price of products be properly controlled. Even when importing from Laos or Cambodia the materials are still mostly Chinese, and so the price will remain higher than importing directly.
Facing the complicated task of securing raw materials, many companies are trying to abolish imports or at least minimizing dependence on one market by diversifying their sources.
Firms will need to more actively participate in trade agreements such as Trans-Pacific Partnership (TPP). Without being proactive in wider scouting for materials, they will almost certainly be unable to exploit the advantages of TPP.