Vietnam could overtake China as the “world’s manufacturing hub” amid a prolonged economic turmoil largely caused by the Covid-19 pandemic and China’s unpredictable policies causing international companies to reconsider their exposure to the country.
Supply chain issues have compounded the woes as China continues to battle the virus outbreak in key production hubs such as Guangdong province and Shanghai, resulting in unreliable deliveries of factory orders.
In turn, Vietnam’s economic data for the first quarter appeared to show a more upbeat outlook as the country’s pandemic receded. In addition, cheaper land acquisition rights, labor wages and operating expenses for factories and warehouses have in the past caught the attention of large electronics manufacturers such as Samsung, Foxconn and even Chinese smartphone giant Xiaomi, alongside IBM, Microsoft, Nestle, Procter & Gamble, and others. Gambling, Pepsi, Unilever, Nike and Honda to name a few.
growing faster than China
The country’s economy expanded by about 5 percent in the first quarter of 2022 from a year earlier, outpacing China’s 4.8 percent growth, according to Vietnam’s General Statistics Office. During the same period, Vietnam’s foreign trade volume increased to US$176.35 billion, a year-on-year increase of 14.4%. By contrast, China’s foreign trade grew by 10.7% in yuan terms in the first quarter.
In addition, foreign investors and other foreign-owned businesses continue to pour more money into the country, which has nearly 100 million residents and a large, well-educated and hard-working workforce.
Historically, China began economic reform and opening up in 1978. Vietnam followed in China’s footsteps and started its own market reform in 1986, known as “doi moi”. Both countries have seen impressive economic growth over the past few decades.
Geopolitical and Macroeconomic Challenges
However, the outbreak of the Sino-US trade war in 2018 accelerated the fourth wave of industrial chain transfer, with Vietnam, Mexico and other countries becoming the biggest winners of the trade dispute.
Vietnam’s trade with the US has grown significantly since 2018. Vietnam’s trade surplus with the United States will rise from $63 billion in 2020 to $81 billion in 2021, a record high, the latest figures show.
Analysts expect Vietnam to continue to be attractive for foreign investment for the foreseeable future and – most importantly – to serve as a source of supply chain diversification amid geopolitical macroeconomic challenges and insecurity land.
Vietnam could overtake China as the “world’s manufacturing hub” amid a prolonged economic turmoil largely caused by the Covid-19 pandemic and China’s unpredictable policies causing international companies to reconsider their exposure to the country. Supply chain issues have compounded the woes as China continues to battle the virus outbreak in key production hubs such as Guangdong province and Shanghai, resulting in unreliable deliveries of factory orders. In turn, as the pandemic hits…
Vietnam could overtake China as the “world’s manufacturing hub” amid a prolonged economic turmoil largely caused by the Covid-19 pandemic and China’s unpredictable policies causing international companies to reconsider their exposure to the country.
Supply chain issues have compounded the woes as China continues to battle the virus outbreak in key production hubs such as Guangdong province and Shanghai, resulting in unreliable deliveries of factory orders.
In turn, Vietnam’s economic data for the first quarter appeared to show a more upbeat outlook as the country’s pandemic receded. In addition, cheaper land acquisition rights, labor wages and operating expenses for factories and warehouses have in the past caught the attention of large electronics manufacturers such as Samsung, Foxconn and even Chinese smartphone giant Xiaomi, alongside IBM, Microsoft, Nestle, Procter & Gamble, and others. Gambling, Pepsi, Unilever, Nike and Honda to name a few.
growing faster than China
The country’s economy expanded by about 5 percent in the first quarter of 2022 from a year earlier, outpacing China’s 4.8 percent growth, according to Vietnam’s General Statistics Office. During the same period, Vietnam’s foreign trade volume increased to US$176.35 billion, a year-on-year increase of 14.4%. By contrast, China’s foreign trade grew by 10.7% in yuan terms in the first quarter.
In addition, foreign investors and other foreign-owned businesses continue to pour more money into the country, which has nearly 100 million residents and a large, well-educated and hard-working workforce.
Historically, China began economic reform and opening up in 1978. Vietnam followed in China’s footsteps and started its own market reform in 1986, known as “doi moi”. Both countries have seen impressive economic growth over the past few decades.
Geopolitical and Macroeconomic Challenges
However, the outbreak of the Sino-US trade war in 2018 accelerated the fourth wave of industrial chain transfer, with Vietnam, Mexico and other countries becoming the biggest winners of the trade dispute.
Vietnam’s trade with the US has grown significantly since 2018. Vietnam’s trade surplus with the U.S. will rise from $63 billion in 2020 to $81 billion in 2021, a record high, the latest figures show.
Analysts expect Vietnam to continue to be attractive for foreign investment for the foreseeable future and – most importantly – to serve as a source of supply chain diversification amid geopolitical macroeconomic challenges and insecurity land.
