One of the major reasons for the uptick in Vietnam’s cotton industry is the demand for yarn in China. This has been explained by the recent growth in the Chinese garment industry.
The industry has thrived on the demand from the US and Europe for inexpensive manufactured clothes.
In China, the industry focuses on producing finished textile goods, which explains the demand for the yarn from Vietnam. Some experts and industry watchers had been concerned that China’s internal cotton production would increase to the point where it would render Vietnam imports unnecessary.
However, as many in China increasingly turn to the cities for employment and the urban lifestyle, China is having a harder time meeting its agricultural labor needs and hence a high dependence on yarn imports from Vietnam has developed.