NEWS & EVENTS

Amcham CEO: Covid-19 strengthened many companies' decision to come to Vietnam, confirming the China strategy + 1

29/04/2020
Indeed, Vietnam has certain advantages in manufacturing compared to China. But experts do not think that Vietnam can replace China.
"With a young population, a large workforce compared to other countries in Southeast Asia, and relatively good infrastructure, Vietnam has really emerged as an attractive industrial and ancillary belt. with foreign businesses moving to Vietnam, "Samuel Pursch, Deputy Director of Vriens & Partners told CNA in episode 43 of the Insight reportage series called" Vietnam: New China? ".
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Many companies are relying too much on the supply chain in China, so they wish to be able to diversify, so that if something goes wrong in China, they have another option. Partly because wages in China are rising, so very quickly, they will no longer have competitive cost advantage. At that time, Vietnam will be one of the economies that most companies seek, because they have many similarities with China. And in many ways, doing business in Vietnam is easier for a foreign company.

Indeed, Vietnam has certain advantages in manufacturing compared to China. But experts do not think that Vietnam can replace China.

Vietnam has 95 million people, while Guangdong alone - the birthplace of Chinese special economic zones is 110 million. Foxconn has a large manufacturing base in Guangdong, while two Chinese technology giants Huawei and ZTE are also based here. The province, with easy access to Hong Kong and its coastal ports, is China's cornerstone of the global economy.
 
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Professor Alex Capri at the National University of Singapore Business School said: "I don't think Vietnam can become the next China, simply because they are not as large as China. infrastructure for nearly three decades. And China has played a role as well as a large proportion in certain areas of the global value chain. " China has an area 29 times larger than Vietnam and has a population of nearly 1.4 billion - big compared to 96 million.

"At present, Vietnam still depends on China and other countries in Southeast Asia for many components used in the manufacturing process. I think the manufacturing industry will continue to be invested in cars - The segment has a lot of competitors.

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