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MARKET WATCH 10 APRIL, 2019

NATIONAL

INTERNATIONAL

 

IMF forecasts dip in global growth in 2019

India’s growth projected to pick up from 7.1% last year to 7.3% this year and 7.5% in 2020. The International Monetary Fund (IMF) has projected that global growth will be 3.3% in 2019, down from 3.6% in 2018 and 4% in 2017, IMF Chief Economist Gita Gopinath told the press at the release of the World Economic Outlook 2019 April report, at the start of the World Bank IMF Spring Meetings. This lower projection is due to lower global expansion in the second half of 2018 caused by U.S.-China trade tensions, macroeconomic stress in Turkey and Argentina, tighter credit policies in China and financial tightening plus a normalisation of monetary policy in advanced economies.

‘Robust consumption’

India’s growth is projected to pick up (from 7.1% in 2018) to 7.3% in 2019 and 7.5% in 2020, “supported by the continued recovery of investment and robust consumption amid a more expansionary stance of monetary policy and some expected impetus from fiscal policy,” the report said. These forecasts are nevertheless less by 10 and 20 basis points from the January and October forecasts. “Nevertheless, reflecting the recent revision to the national account statistics that indicated somewhat softer underlying momentum, growth forecasts have been revised downward compared with October 2018 WEO by 0.1 percentage point for 2019 and 0.2 percentage point for 2020, respectively,” the IMF said. The IMF expects growth to pick up in the second half of the year driven by an accommodative policy stance in advanced economies, the prospects of easing of trade tensions between the U.S. and China and ramped up fiscal and monetary stimulus by China to counter the trade war’s effects. Global growth is therefore expected to return to 3.6%, but this is subject to a rebound in Argentina and Turkey and certain emerging market risks not manifesting. Brexit uncertainties and China’s growth not being as high as expected (down from 6.6% in 2018 to 6.3% and 6.1% in 2019 and 2020 respectively) are risks that will impact these projections.

Moderation in expansion

Beyond 2020, global growth is expected to level out at 3.6% over the medium term, driven by a moderation in expansion in advanced countries (caused by weak productivity growth and slow labour force growth) and the stabilisation of emerging market expansion at 2020 levels. Advanced economies are expected to slow down to 1.6% growth by 2022 and remain at that rate thereafter. For emerging markets and developing countries, growth is expected to steady at 4.8% over the medium term and given that these groups are growing faster than advanced economies, their contribution to global growth is expected to increase from 76% to 85% over the next five years. However, there are “important differences” within emerging markets and developing economies. For instance, China is expected to slow down to 5.5% by 2024 as it moves towards increasing private consumption and services and regulatory tightening. India’s growth is expected to stabilise at 7.75% over the medium term, driven by structural reforms and the easing of infrastructure bottlenecks. In terms of policy priorities, the IMF has called for a “continued implementation of structural and financial sector reforms” in order to lower public debt and aid growth. Specifically, it says a continued fiscal consolidation is needed to bring down public debt, strengthening goods and services tax compliance and lowering subsidies. The report also notes “important steps” taken to speed up the resolution of Non Performing Assets (NPAs) and a simplified bankruptcy framework — measures that can be reinforced by stronger governance of public sector banks. The IMF also calls for laws around land reform to change, to expedite infrastructure development as well as changes to hiring and firing laws in order create jobs and “absorb the country’s large demographic dividend”.

China slowdown

Domestic regulations were tightened to constrain shadow financial intermediation, resulted in slower domestic investment, especially in infrastructure. There was also weakened spending on consumer durables and automobiles, export orders fell as a result of the US-China trade actions, and growth fell to 6.0% in the second half of 2018, from 6.8% in the first half. China is projected to grow at 6.3% and 6.1% in 2019 and 2020 respectively.

Data-driven monetary policy

There were several references during the briefing to the need for monetary policy being data-driven. The Hindu spoke with Ms Gopinath on how Central Bank independence had factored into the short and medium term forecasts. “Well, I mean, we strongly emphasise operational independence for the Central Bank, and that is how we how also make our assumptions in our forecast and I think that is important for all the countries…we push for operational independence of the Central Bank,” she said. The IMF WEO 2019 also says, “ a social dialogue across all stakeholders to address inequality and political discontent will benefit economies”. Additionally, it calls for multilateral cooperation to address trade conflicts, climate challenges, cybersecurity issues and to enhance the effectiveness of the international tax system.

Source: The Hindu

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India to build developing country coalition with Brazil, China at informal trade ministers’ meet

The special provisions are already under threat with the US and Australia proposing member-specific limits on fisheries subsidies. India plans to build a coalition of developing countries at the upcoming informal meeting of trade ministers on May 13-14 to develop a common understanding to reform the multilateral trading system and institutional issues at the World Trade Organization (WTO). New Delhi has invited 20 countries for the mini ministerial including China, South Africa, Brazil, Indonesia, Kenya and Malaysia with the objective of retaining development at the core of the multilateral trade body. “We are confronted with multiple challenges, some of which could erode the very foundation of the WTO,” said an official aware of the details adding that unless developing countries collectively recognise the problems and develop a common understanding on the way forward, the multilateral trade rules may become even more asymmetric. This year’s mini-ministerial meeting comes as developing and least developed countries fight to safeguard their eligibility to get Special and Differential Treatment (S&DT) at the WTO such as longer time period to implement agreements and commitments, measures to increase trading opportunities, provisions to protect their trade interests, and support to build capacity to handle disputes and implement technical standards. The special provisions are already under threat with the US and Australia proposing member-specific limits on fisheries subsidies. India’s proposal to reform the multilateral trade watchdog could also be discussed at the two-day meet. New Delhi has sought amendment of laws on unilateral action by members on trade issues and resolution of the WTO’s dispute settlement system. It also seeks to revive talks to strengthen global norms to protect traditional knowledge from reckless patenting by corporates through commercial exploitation of natural products by obtaining patents without fairly compensating the communities from which these originate -- an issue that has harmed India and Africa equally. India had organised a similar informal gathering last year in the wake of talks collapsing at the ministerial conference in December 2017. “The objective is to have a coordinated position, including at the Paris Mini Ministerial. We must get together to exchange views and ideas on how best to address the challenges facing the WTO in an informal and candid manner,” the official added. The Paris mini-ministerial is being organised by Australia on the side-lines of OECD on May 23.

Source: Economic Times

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Once a textile hub, Madurai now yearns for industrial growth

It is losing out to competitors as representatives have failed to argue the case for the city at the right forums, say observers. Madurai district is generally seen as a stronghold of the Dravidian majors, more so of the AIADMK. However, when it comes to Parliamentary elections, barring the ones in 2009 and 2014, Madurai has elected candidates from the national parties or their offshoots in the remaining 14 polls, eight of which were won by the Congress and four by either of the Left parties. B. Thirumalai, whose book Madurai Arasiyal chronicles its political history, says the trend was not incidental. “Congress’ presence was due to Madurai’s association with the freedom movement and the presence of leaders like ‘Madurai Gandhi’ N.M.R. Subbaraman and P. Kakkan. Left parties, on the other hand, had a dominant presence because of trade unions,” he said. While the influence of the two parties has waned over the years, Madurai has remained a popular choice for them to contest elections as part of coalitions led by Dravidian parties, since they could capitalise on the small vote bank they have managed to retain. The diminished presence of trade unions and the Left parties can be seen as an indication of Madurai losing the race in industrial growth to competing cities like Chennai, Coimbatore and Tiruchi. “Until the late eighties, there were at least 17 large-scale textile mills in and around the city,” Mr. Thirumalai recollects. Arguing that lack of industrial growth remains the biggest concern for Madurai, S. Rethinavelu, senior president, Tamil Nadu Chamber of Commerce and Industry, says this, in turn, contributes to unemployment and caste-related violence. He claims elected representatives have failed to argue the case for the city at the right forums. “A simple example is the long-pending demand to include Madurai airport in the Bilateral Air Service Agreement with other countries so that direct international flights could be operated here. This will aid industrial growth, particularly exports and tourism, and costs nothing, but has not been done,” he says. A key project, which promised to bring industrial growth to Madurai and the southern districts, but remains only on paper, is the Madurai-Thoothukudi Industrial Corridor. In a meeting with industrialists here in November 2018, Minister for Industries M.C. Sampath said the project was being implemented as part of the Chennai-Kanniyakumari Industrial Corridor, and a Comprehensive Development Plan was ready. However, nothing much has happened since. While Madurai is renowned for its malli, the demand to promote perfume-related industries and for the setting up of a research centre has yet to be fulfilled. The area in which malli is cultivated in the district is witnessing a gradual decline due to non-availability of adequate support. With the proposal to construct an All India Institute of Medical Sciences (AIIMS) and the presence of a few big multi-specialty hospitals, Madurai is now touted as a city with the potential to become a health hub. However, the inordinate delay in the construction of AIIMS, for which the foundation stone was laid only earlier this year, after more than four years of delay since the project was announced, has kept hopes low. “To worsen the situation, demonetisation and the improper implementation of the Goods and Services Tax (GST), has hugely affected the micro-, small- and medium-scale industries, which had a significant presence in Madurai,” Mr. Rethinavelu says.

Water woes

Another key issue is the shortage of water for drinking, agricultural and industrial needs. The State government recently launched a ₹1,150-crore project to augment the drinking water source for the city. “The focus need not be on such mega projects, but instead on improving local resources by rejuvenating Vaigai river and water bodies. This is an area where the funds available with MPs could be spent, but not many have done that,” Mr. Thirumalai said. The CPI(M) candidate Su. Venkatesan, who is contesting as part of the DMK-led Secular Progressive Alliance, the AIADMK’s V.V.R. Raj Satyen and the AMMK’s K. David Annadurai are the key candidates among the 27 in the fray. While the Mukkulathor community has a majority presence in the constituency, a unique feature is the considerable presence of the Sourashtra community, which is believed to play a significant role in swinging the elections. Apart from its small voter base, the CPI(M) is largely banking on the support of coalition parties and Mr. Venkatesan’s credentials as a Sahitya Akademi Award-winning writer. Mr. Raj Satyen is the son of former Mayor of Madurai Corporation and serving MLA of Madurai North constituency, V.V. Rajan Chellappa, an AIADMK veteran. The party has a well-oiled organisational base, which it is leveraging to the fullest extent in the campaign. However, it remains to be seen if the intra-party feud in the district, which came to light during the announcement of the candidate, would play spoilsport. Mr. David Annadurai (AMMK) is the son of late AIADMK leader and Speaker of the Legislative Assembly K. Kalimuthu. He is expected to split a considerable amount of votes, particularly in places like Melur, where the party was launched.

Source : The Hindu

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Job crisis? MSMEs expected to create 1 crore jobs in 5 years, says report

Even as the government has been under severe criticism over the alleged job crisis, it is India's micro, small and medium enterprises (MSMEs) that holds the key to near future job generation. Even as the government has been under severe criticism over the alleged job crisis, it is India’s micro, small and medium enterprises (MSMEs) that holds the key to near future job generation. MSMEs are expected to create around 1 crore jobs in the coming four-five years. While rising the middle class and the disposable income makes India an attractive market for consumption, a substantial portion of that is consumed by imports that hinders job creation ability by the domestic manufacturing sector, said a report by consulting firm Nomura Research Institute. The product groups manufactured in various clusters including artificial Jewellery, sports goods, scientific instruments, metal utensils, machine equipment like textile machinery, electric fans, rubber, plastic, leather & related products, bicycle parts and auto components, textile, wood, paper, food, minerals etc., suggests that high focus on developing MSMEs in these groups can create an additional 75 lakh – 1 crore jobs in the next four-five years through partial substitution of imports, the report said. “To scale-up, the MSME sector needs a market-oriented strategy based on two key areas of demand led manufacturing and advocacy marketing of the products,” said Ashim Sharma, Partner & Group Head at NRI Consulting & Solutions. To change the perception about products manufactured by MSMEs since traditional industries lose out on imports perceiving them to be cheap, and poor quality, the report called for identifying influencers in B2B and B2C segments to help develop a positive perception about the products. These people should be made to experience the products as well as given an overview of the changes brought about in their design and manufacturing (wherever necessary) to make them in sync with the modern customer’s demands. If satisfied with the products, they would act like brand ambassadors for the MSME produce, the report said. India’s MSME sector contributes to around 3.6 crores (70 per cent) jobs in the manufacturing sector, as per the Ministry of MSME’s annual report 2017-18.

Source: Financial Express

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Zoho launches e-commerce solution for small retailers

Hyther Nizam, vp-product management, Zoho Corp said that the company had been running a beta version for the past year with 3,500 retailers globally, about 10% of which were in India. Zoho Corp has announced the launch of Zoho Commerce, an e-commerce solution which will help small retailers set up their own ecommerce sites. Hyther Nizam, vp-product management, Zoho Corp said that the company had been running a beta version for the past year with 3,500 retailers globally, about 10% of which were in India. “People want to move away from marketplaces and have more control over their online sales and improve their margins,” he said. The product would be integrated with existing Zoho backend solutions like Zoho Books (accounting software) and Campaigns, an email campaign software. There are over 480 million internet users in India, and this number will grow to over 600 million by 2021. The total size of e-commerce market is around $22 billion—nearly 4.5% of the total retail—in India, and it is expected to grow to $50 billion by 2023. Zoho Commerce is powered by Zoho's AI assistant Zia and is GST compliant. Nizam said that unlike existing companies that offered the same service where the retail pays on a per transaction basis, they would charge a flat monthly fee on a monthly gross merchandise value (GMV) of upto Rs 25 lakhs. “We want to disrupt the marketplace and will take a bottom up approach, starting with small and medium retailers,” said Nizam. The company would also educate the merchants in how to increase traffic to their website, run email campaigns and on social media marketing. Zoho currently has over 40 products across different business categories, including sales and marketing, customer support and accounting.

Source: Economic Times

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Rupee opens flat at 69.28 against US dollar

The rupee on Wednesday opened flat at 69.28 per US dollar, just two paise higher against Tuesday's close of 69.30. The domestic currency snapped its three-day losing streak in the previous session and rose 37 paise to settle at 69.30 against the greenback. Forex traders said the dollar's weakness against its key rivals overseas and heavy buying in domestic equities also supported the domestic currency. Rupee rose against the US dollar and snapped its four –day losing streak following suspected fund inflows in the debt segment. Market participants are cautious ahead of the important global events that are lined up today, says Gaurang Somaiya, Research Analyst (Currency) at Motilal Oswal Financial Services. On the domestic front too, inflation and industrial production number will be released later this week. On Tuesday, IMF released its growth forecast report wherein it has trimmed growth figures for India as well as for other major nations. Today, "USD/INR pair is expected to quote in the range of 69.40 and 70.20," Somaiya added. Asian shares slipped from eight-month highs on Wednesday as the International Monetary Fund lowered its global growth outlook and as tensions over tariffs between the United States and Europe escalated, Reuters reported. The US dollar was flat at 111.14 yen, having fallen 0.5 per cent so far this week. In the commodity market, oil prices held firm after hitting five-month highs the previous day as fighting in Libya raised supply disruption concerns, said a Reuters report.

Source: Business Standard

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Global Textile Raw Material Price 09-04-2019

Item

Price

Unit

Fluctuation

Date

PSF

1321.70

USD/Ton

0.79%

4/9/2019

VSF

1845.62

USD/Ton

0%

4/9/2019

ASF

2496.05

USD/Ton

0%

4/9/2019

Polyester POY

1354.44

USD/Ton

-1.36%

4/9/2019

Nylon FDY

2887.50

USD/Ton

0%

4/9/2019

40D Spandex

4748.00

USD/Ton

0%

4/9/2019

Nylon POY

1533.05

USD/Ton

0%

4/9/2019

Acrylic Top 3D

3155.41

USD/Ton

0%

4/9/2019

Polyester FDY

5626.15

USD/Ton

0%

4/9/2019

Nylon DTY

1580.68

USD/Ton

0.47%

4/9/2019

Viscose Long Filament

2723.77

USD/Ton

0.55%

4/9/2019

Polyester DTY

2679.12

USD/Ton

0%

4/9/2019

30S Spun Rayon Yarn

2537.72

USD/Ton

0%

4/9/2019

32S Polyester Yarn

2031.67

USD/Ton

0.37%

4/9/2019

45S T/C Yarn

2887.50

USD/Ton

0%

4/9/2019

40S Rayon Yarn

2173.06

USD/Ton

0%

4/9/2019

T/R Yarn 65/35 32S

2545.16

USD/Ton

-1.16%

4/9/2019

45S Polyester Yarn

2887.50

USD/Ton

0%

4/9/2019

T/C Yarn 65/35 32S

2440.98

USD/Ton

0.61%

4/9/2019

10S Denim Fabric

1.37

USD/Meter

0%

4/9/2019

32S Twill Fabric

0.83

USD/Meter

0%

4/9/2019

40S Combed Poplin

1.11

USD/Meter

0%

4/9/2019

30S Rayon Fabric

0.63

USD/Meter

0%

4/9/2019

45S T/C Fabric

0.71

USD/Meter

0%

4/9/2019

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.14884 USD dtd. 09/04/2019). The prices given above are as quoted from Global Textiles.com.  SRTEPC is not responsible for the correctness of the same.

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Pakistan: MOC&T to amend Import and Export Act

Ministry of Commerce & Textile (MOC&T) has all set to amend the Imports and Exports (Control) Act, 1950 (XXXIX of 1950), while extending the date of printing labels on imported items in Urdu and English till June 30, 2019. According to the SRO 438 (1)/2019, the government amending the earlier SRO 237 dated February 19, 2019, has said that the new directives will take effect from the 1st of July, 2019. The fresh SRO also said that the consignments being imported shall have 50% (fifty per cent) of the shelf life, calculated from the date of filing of Import General Manifest (IGM) instead of 66 % (2/3rd) of the shelf life remaining from the date of manufacturing. Pakistan FMCG Importers Association (PFIA) Chairman Anjum Nisar and Vice Chairman Muhammad Ejaz Tanveer welcoming the new order of the Ministry of Commerce & Textile has urged the government that the SRO 237 should be withdrawn completely. It has created numerous problems for the commercial importers. They said that all items being imported by the commercial importers or FMCG sector are daily use items. These are high quality and hygienic food items which are not luxury goods and these should not be subjected to such treatment. They said that the government should declare the earlier issued notification as null and void and facilitate this trade which is contributing millions of rupees in the government exchequer and providing jobs to hundreds of thousands directly and indirectly.

Source: Daily Times

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US moves to put new tariffs on billions worth of EU imports

The WTO ruled in May last year that the EU had in fact provided some illegal subsidies to Airbus, hurting U.S. manufacturer Boeing. The United States wants to put tariffs on $11.2 billion worth of EU goods from airplanes to Gouda cheese to olives to offset what it says are unfair European subsidies for plane maker Airbus. While the size of the tariffs is small compared with the hundreds of billions the U.S. and China are taxing in their trade war, it suggests a breakdown in talks with the European Union over trade at a time when the economy is already slowing sharply. The U.S. and EU have been negotiating since last year about how to avoid tariffs that President Donald Trump has wanted to impose to reduce a trade deficit with countries like Germany. The U.S. Trade Representative’s office released late Monday a list of EU products it would tax in anticipation of a ruling by the World Trade Organization this summer. The U.S. had in 2004 complained to the WTO, which sets the rules for trade and settles disputes, that the EU was providing unfair support to Airbus. The WTO ruled in May last year that the EU had in fact provided some illegal subsidies to Airbus, hurting U.S. manufacturer Boeing. The U.S. expects the WTO will say this summer that it can take countermeasures to offset the EU subsidies. It will now start a consultation with industry representatives on the list of EU goods it wants to tax so that it can have a ready list. “This case has been in litigation for 14 years, and the time has come for action,” said U.S. Trade Representative Robert Lighthizer. The move, while nominally following international trade rules, appears to also reflect U.S. frustration at the slow pace of talks on trade with the EU. Trump in June last year imposed tariffs of 25% on steel imports and 10% on imported aluminum from the EU. The EU responded with tariffs on about 2.8 billion euros’ worth ($3.4 billion) of U.S. steel, agricultural and other products, from Harley Davidson bikes to orange juice. The U.S. and EU have since July been in talks to scale back the tariffs, with Trump holding out the bigger threat of slapping tariffs on European cars a huge industry in the region should the negotiations not yield a result. U.S. officials have repeatedly expressed frustration at the slow pace of the talks. The U.S. announcement also comes just as Boeing is facing broad challenges over the global grounding of its 737 Max commercial jet amid concerns that technical problems could have contributed to two crashes in five months. In a separate case, the WTO has also ruled that Boeing got a small amount of illegal support from the state of Washington worth some $100 million a year. Tariffs on European airplanes could in theory help Boeing and hurt Airbus, whose shares were down 1.5 percent on Tuesday on a day when stock markets were trading higher. The U.S. announcement also comes as China’s prime minister meets top European Union officials to discuss thorny issues, including trade.

Source: The Hindu

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Crude Oil dips on global growth worry, possible output rise

NEW YORK (Reuters) - Oil fell from five-month highs on Tuesday after the International Monetary Fund cut its global economic growth forecasts and as Russia signaled it may retreat from its production-cutting deal with OPEC. A threat by Washington to slap tariffs on hundreds of European goods halted a rally in global equities, which also dragged on oil futures. Brent settled 49 cents lower at $70.61 a barrel, after hitting $71.34, its highest since November. U.S. crude ended at $63.98 a barrel, down 42 cents on the day, after also reaching a five-month high of $64.79. “I think the IMF lowering global growth is really the biggest headwind today that oil futures are seeing,” said Phil Streible, senior commodities strategist at RJO Futures in Chicago. The IMF cut its global economic growth forecasts for 2019 and warned growth could slow further due to trade tensions and a potentially disorderly British exit from the European Union. The IMF downgrade, its third since October, added to concerns a slowdown this year will hit fuel consumption and prevent crude prices from rising even higher. Prices also faltered as Russia, a participant in the OPEC-led supply cuts that expire in June, signaled on Monday it wants to raise output when it next meets with OPEC because of falling stockpiles. On Tuesday, President Vladimir Putin said Russia did not support an uncontrollable rise in oil prices and that the current price suited Moscow. “We are ready for cooperation with OPEC in decision-making ... But whether it would be cuts, or just a stoppage at the current level of output, I am not ready to say,” Putin told an Arctic conference in St. Petersburg. U.S. sanctions on Iran and Venezuela have deepened the OPEC supply cut and concern has grown this week about the stability of Libyan output. The OPEC member pumps around 1.1 million barrels per day, just over 1 percent of global supply. Rising U.S. crude production and inventories continued to weigh on the market. U.S. crude production was expected to rise 1.43 million bpd in 2019 to average 12.49 million bpd, the U.S. Energy Information Administration (EIA) said on Tuesday, up from its previous forecast for a rise of 1.35 million bpd. [nL1N21R10G] U.S. crude inventories rose by 4.1 million barrels last week, compared with analysts’ expectations for an increase of 2.3 million barrels, data from industry group the American Petroleum Institute showed after prices settled. [API/S] Crude stocks at the Cushing, Oklahoma, delivery hub fell by 1.3 million barrels, API said. The Energy Information Administration releases its oil data on Wednesday.

Source: Reuters

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Will Vietnam become the next ‘world’s factory’ as production moves away from China?

The Vietnamese economy has been touted as a major beneficiary of the US-China trade war as companies are reportedly relocating factories to Vietnam to rebuild their supply chains. Whether the Southeast Asian country can replace China to become the next "world's factory" has become a hot topic of discussion. Vietnam's GDP grew 6.79 percent in the first quarter of this year thanks in large part to the growth in its processing and manufacturing sector. Though its economic growth rate slowed from the 7.31 percent gain in the previous quarter, the country is still likely to be the fastest-growing economy in Asia during the period. In the past, Vietnam attracted capacity transfers from many manufacturers in textiles, garments and other low-end industries that have fled China over the past decade due to rising labor costs. In 2010, Vietnam surpassed China for the first time as the leading producer of Nike shoes. Now against the background of the trade war, the Southeast Asian country seems well poised to become a new regional manufacturing hub across a variety of sectors. In order to bring high-tech manufacturing back to the US, the Trump administration has taken a series of actions, including initiating the trade war with China, to reshuffle global supply chains. Multinational companies have also been moving their operations to countries with lower costs, such as Vietnam, partially under the cost pressure caused by US tariffs on Chinese exports. With geographical proximity to China, Vietnam boasts the largest industrial manufacturing system in Southeast Asia. A young population and low labor costs also add to its appeal to multinational companies. As international electronics giants are relocating to Vietnam, the country is set to become the new manufacturing center for the global electronics industry. In 2018, South Korea's Samsung and Japan's Olympus closed their respective factories in Shenzhen, South China's Guangdong Province, and transferred their operations to Vietnam. Samsung has already invested billions of dollars in building a grand manufacturing base in the Saigon High-Tech Park in Ho Chi Minh City. The park has also received heavy investment from other high-profile tech giants like Intel, Schneider and Jabil. Moreover, in 2015, Microsoft moved its Nokia manufacturing from Beijing to Hanoi, the Vietnamese capital. Many observers often cite low labor costs as a major factor behind Vietnam's growing appeal to multinationals. The labor costs in Vietnam are generally about one-third to one-quarter of those in most areas in China, representing a significant advantage for labor-intensive manufacturing industries. However, these observers often overlook other key factors attracting global manufacturers, such as a young population, the country's proximity to China, a supportive policy environment and solid economic growth. Moreover, China's industrial upgrading and transformation have also played an important role in facilitating the transition of manufacturing work to Vietnam. As China accelerates its steps in moving into medium and high-tech manufacturing due to rising labor costs, low-cost manufacturing will inevitably flow to Vietnam and other economies. While the question of whether Vietnam can replace China to become the world's next top hub for low-cost manufacturing has caused a clamor, it remains unrealistic to expect Vietnamese manufacturing to completely replace Chinese manufacturing. Despite the distinctive advantages in attracting foreign manufacturers, there are still limitations to Vietnamese production. To name just a few, the Southeast Asian country's industrial and supply chains can't be compared to China's in terms of both completeness and comprehensiveness. After years as the world's factory, China has developed the most complete industrial and supply chains in the world, with thousands or even tens of thousands of suppliers available for manufacturing sophisticated products. And Vietnam is still far from having such a foundation of suppliers. Moreover, China's infrastructure - including roads, ports and other logistical support - also outperforms Vietnam's infrastructure, which is equivalent to that of China's decades ago. In short, because of the industrial chain problem, it is basically impossible for Vietnam to completely take over China in terms of manufacturing capacities. There is no need to panic about the current manufacturing shift to Vietnam, which is totally normal, and inevitable, in the market economy. Yet, it is worth noting that the biggest concern in the production transfer may be the unemployment problem. Some experts believe that since all industrial countries have experienced similar situations in the course of their development, China can also pull through it. Nevertheless, the difference for China lies in the fact that its working population is just too large. That should be the main issue deserving attention and caution during the transition.

Source: Global Times

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UKFT announces new criteria for tradeshow access grants

UKFT (UK Fashion and Trade Association) has announced that the department of international trade has agreed to a full roster of Tradeshow Access Programme (TAP) grants for 2019/20. UKFT will be able to help companies with grants of £1200 for events in Europe and the US and, potentially, up to £1500 in markets like China (for Intertextile Shanghai). Eligible companies should be SMEs and registered in the UK. A lifetime allocation of up to six grants is available to companies. However, DIT has announced some important changes to the overall emphasis of the scheme and these will create new responsibilities and obligations for exhibitors using a new scheme, according to a press release by UKFT. Under the new scheme, there is no automatic entitlement to grants. UKFT will be required by DIT to make a business case for each grant and companies will be expected to justify taxpayers’ investment in their business. They will have to represent a good Return on Investment (ROI) for the grant. All TAP exhibitors will have to provide detailed commercial information both before and after the event in order to drawdown the funding and to enable UKFT to justify grants to HM Treasury. Companies will be required, as a condition of support, to include DIT/GREAT branding on their stand.

Source: Fibre2Fashion

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Turning old clothes into art

Eileen Fisher's New York factory is Marie Kondo's worst nightmare: Filled with bags and bags of old clothes, it houses the over 1.3 million garments the brand has collected since launching its take-back program in 2009. These old designs aren't being hoarded for posterity's sake, though. If all goes to plan, one day they'll all be reused instead of sent off to a landfill.How Eileen Fisher is using old clothes in a new way. For years, customers have returned their gently worn (or not-so-gently-worn) Eileen Fisher garments to stores for a credit. From there, these old pieces have either been repaired, resold, or sent to storage to one day be re-imagined as part of the brand's newly unveiled Waste No More program. "Wasting no more and making beauty and art out of things that would have gone to waste—I love that. That's my favorite," Eileen Fisher, dressed in an impossibly chic black ensemble, tells mbg from the middle of her namesake store in Brooklyn. Earlier this week, the space was transformed into a gallery to display some of Waste No More's first crop of creations: tapestry-like wall hangings, pillows, and fabrics, all in various shades of white to challenge the idea that trash is always dirty. These pieces—some of which are made of over 100 garments—were constructed using a felting technique that doesn't require any water or dyes. The longer you look at some of them, the more you can make out the dresses and tops that form their fabric. Once the kickoff exhibitions in New York and Milan wrap up, all Waste No More pieces will be resold on the Eileen Fisher website so that everyone has a chance to check out the beauty that can emerge from waste. A future where we can all Waste No More. So far, the brand has managed to reuse upward of 200 yards of stockpiled material with this felting technique, and it's just the beginning. "We have so much, but once we start to really roll, it's going to move fast," Fisher says. There's a quiet urgency to the project. Fisher, the visionary behind one of largest women's apparel brands to be B Corp certified for its environmental commitment, seeks to one day take back every last item she's put out into the world. And in the process, she wants to make a beautiful spectacle to get other designers to do the same. "I hope that we inspire others to see that they can be really creative and do amazing things." She smiles. "And make a successful business out of it, too."

Source: Yarn and fibre

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RadiciGroup displays dyed yarns at Fuori di Design

RadiciGroup, a leading developer of polyamide, chemical intermediates, synthetic fibres, and nonwovens, is showing solution dyed polyamide yarns used for carpets in five shades, along with Clariant ColorWorks at Fuori di Design. It is an exhibit promoted by Materioteca which is being held during the Milano Design Week from April 9-14, 2019, in Italy. Now in its eighth edition, this year’s event features the five colours of “care-Less”, a social trend identified by Clariant ColorWorks. RadiciGroup is showing along with this Swiss group, the creator of the guide ColorForward 2020, and the Treviso-based Brado, a supplier of solutions in the field of seating design. Materioteca serves as a mediating structure between the world of creative design and materials technology. Through the years, it has become a network and laboratory of ideas, where new collaborations, proposals and initiatives are born. For the last eight years, it has organised Fuori di Design, a collective exhibition of objects ranging from art to design, jewellery and furnishings, to promote and valorise the culture of design. (GK)

Source: Fibre2fashion

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