Indian news outlet stattimes.com recently published an article saying Vietnam is likely to become a burgeoning industrial hub, especially for tech and apparel, as well as its beautiful beaches and delicious cuisine.
The newswire pointed out that while parts of Asia are still in the process of recovering from the global pandemic, the Vietnamese economy has boomed, reaching an impressive 8% growth last year, faster than other major regional economies in Asia, including India, Japan, and China. In addition, export revenue hit US$372 billion, an annual rise of 10%.
The Indian news outlet attributed the boom for Vietnamese industry to the disruption to supply chains occurring on the Chinese Mainland, Asia’s largest manufacturing hub, particularly as factories were subject to shutdowns during the COVID-19 pandemic. As a result, companies turned to alternative locations as a means of continuing and diversifying their production streams.
According to the publication, the country boasts a competitive labour force and low manufacturing costs with strong infrastructure. It has a young and growing population of 97 million, 70% of whom are under 35 - a considerable labour force for the manufacturing industry
While China’s manufacturing costs have risen to around US$6.50 per hour, those in Vietnam remain low at less than half the cost, equal to US$2.99 per hour.
Most notably, the country is strategically located along a strip of 3,200km long coastline which makes it, particularly the northern region, an ideal location for shipping cargo in and out. The Government has been investing in improving the nation’s infrastructure, particularly in the northeastern cities, to create a more attractive travel destination and ultimately a more connected port and industrial hub.
The newswire outlined that more companies are now moving their production to Vietnam which is the world’s second-largest manufacturer of tech and apparel, with big brands such as Nike, Adidas, and Samsung all operating across the country.
Moreover, the disruption caused by the pandemic has seen more companies explore options in the Vietnamese market. While Apple manufactures the majority of its products in China, it has been diversifying its production in other countries, namely India and Vietnam.
Last year, the tech giant announced that it will be producing Apple products, mainly Apple Watches and MacBooks, in Vietnam for the first time.
Google’s newest Pixel phone, too, will be made in the country, while Microsoft started shipping Xbox game consoles from Ho Chi Minh in 2022.
Reports have also emerged that Apple supplier Foxconn is looking at investing US$300 million to expand their factories in northern Vietnam, whilst Dell, HP, Nintendo, and Lenovo are all planning on setting up plants in the country as well.
Meanwhile, the Government has been making strong efforts in order to make trade easier between Vietnam and the rest of the world.
To support these efforts, Vietnam has signed free trade agreements with the EU, UK, and nations across the Asia-Pacific region, opening up the country to further trading opportunities.
Another strong driver of trade is the Regional Comprehensive Economic Partnership – a trade agreement among the Asia-Pacific nations of Australia, Japan, Chinese Mainland, New Zealand, the Republic of Korea, and other ASEAN members.
Source: VOV