The value of Vietnam’s yarn exports to China has decreased by 2.5 per cent. The reason is the depreciation of the Chinese currency against the dollar. Vietnam imports cotton from the US to make yarn products for export to China. If the yuan continues to fall, Vietnam’s yarn producers will continue to face difficulties.

Much of Vietnam’s yarn exports are to China. Vietnam is also one of China’s major yarn suppliers. In 2014, Vietnam ranked third in China’s yarn import markets, after India and Pakistan. In 2017 and 2018, Vietnam rose to the first place, accounting for 30 per cent of China’s yarn imports. Chinese partners of some Vietnamese enterprises want a further reduction in import prices.

The selling price is still on a downward trend and there is no sign of recovery, while China has launched a large amount of cotton stockpiles, which makes cotton prices fall sharply. This year, the export volume of the Vietnamese yarn industry is expected to reduce by ten per cent to15 per cent and the selling price is also expected to drop. However Vietnamese companies which export to Europe, Japan or Korea get paid in dollars and so the depreciation of the yuan would not have much effect on them.