Vietnam's textile and clothing industry plays a major role in the country's economy and is its largest manufacturing sector. It provides direct and indirect employment for 4.5 mn people and is the principal source of foreign exchange. Textile and clothing exports have risen sharply in recent years. Between 2010 and 2016 they increased by over 150% to US$28 bn and the country became the world's fifth largest exporter of textiles and clothing. Success has been assisted by a number of positive factors, including joining the World Trade Organization (WTO) in 2007, an industrious and talented workforce, low labour costs and increasing access to international markets, especially the USA and Europe. Vietnam has become the second largest source of foreign textiles and clothing in the US market and has established a strong presence in the Japanese and European markets, especially for clothing. The industry's development has also been helped by the government's policy of encouraging the private sector, even though Vietnam continues to be a communist controlled country. Indeed, the private sector dominates the textile and clothing industry and is its undisputed drivingforce. Also, the government has strongly encouraged foreign investment by offering an attractive range of incentives. Looking ahead, the government is keen to build on this success and has established a number of ambitious targets as it pursues an economic policy aimed at endowing Vietnam with developed nation status by 2020. By that year, the country's textile and clothing exports are targeted to reach US$50 bn and the industry hopes to be employing over 5 mn people directly and indirectly. Moreover, there is an ambition to shift the emphasis of export production from mostly commodity type products towards the manufacture of high added-value fashion items. Meanwhile, as a result of rising prosperity, the domestic market will grow strongly over the next few years.
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