Vietnam Economy Thread

beijingwalker

Experienced member
Messages
4,651
Reaction score
1,065
Nation of residence
China
Nation of origin
China
Can Vietnam beat China to become the "manufactory of the world"?

12-10-2021 - 08:38 AM

Vietnam is considered as one of the fastest growing economies, the most impressive among emerging economies in Asia. So what is the opportunity for Vietnam to replace China to become a "new global factory"?

What makes Vietnam an export powerhouse in the region?

A team of economists from AXA Investment Managers Asia based in Singapore has analyzed and explained the reasons why Vietnam can become an export power in the region, and assessed the prospect of becoming a "factory for export". second world" after China of this Southeast Asian economy.

According to two economists Aidan Yao and Shirley Shen, Vietnam is considered one of the fastest growing economies, the most impressive among emerging economies in Asia (excluding China). deeply integrated into global trade in recent decades.

Macroeconomic experts from AXA Investment Managers Asia affirmed: "Vietnam is increasingly competitive in trade and has become an attractive manufacturing center in the world".

According to the assessment of AXA Investment Managers Asia, Vietnam's successful integration into the Association of Southeast Asian Nations (ASEAN) is the "key" to the strong growth of trade activities.

In the region, Vietnam ranks highly in terms of economic performance, fueled by strong returns from manufacturing development and export potential.

In addition, Vietnam has also signed many free trade agreements (FTAs) with different major regions and economies around the world such as Japan (VJEPA), the European Union (EVFTA), the UK (VJA), and the EU (EU). UKVFTA), Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Regional Comprehensive Economic Partnership Agreement (RCEP), etc., this has created a favorable environment for trade relations to develop. even stronger.

Previous studies by AXA Investment Managers Asia have all shared that Vietnam has been a prominent winner in terms of global export market share in recent years.

Especially as China has successfully risen to assert value in the global trade supply chain, bypassing the gaps in lower value growth, using low-cost labor, and making the country lose its competitiveness. compared to neighboring countries that are making strong breakthroughs like Vietnam.

The research team of AXA Investment Managers Asia said: "Vietnam has achieved a 5-fold increase in export value over the past decade, significantly outperforming the rest of Asia".

In addition, in the past time, Vietnam is considered one of the countries that benefit the most from the trade conflict between the US and China, along with the rapidly increasing competitiveness in the manufacturing sector also contributes to the growth of the economy. Vietnam has risen to become an export power in the ASEAN region in particular and Asia in general.

Figures show that Vietnam's exports to the US increased by 29% in 2019. At the end of last year, Vietnam became the 6th largest importer to the US market, up from 12th place in 2017.

In terms of attracting foreign direct investment (FDI), Vietnam has been particularly successful thanks to the government's preferential policies during the past time. In particular, Vietnam's FDI inflows have grown the fastest in the region.



By 2020, Vietnam has 369 industrial parks, an increase of 180% compared to 2005. Vietnam has also ranked up in the ranking of the "ease of doing business" index of the World Bank (WB), up 23 places up. rank 70 compared to 10 years ago.

Besides, in terms of competitiveness assessment scores based on business facilitation, logistics quality, wage costs, Gross Domestic Product (GDP) growth as well as changes in the In terms of exports and FDI, Vietnam is considered as the most competitive country in the region. This has helped increase export market share impressively in recent years.

Regarding Vietnam's manufacturing industry in the past decade, a series of statistics show that the value of the industry has increased the most, twice the rate of India.

According to AXA Investment Managers Asia, one of the important reasons for Vietnam to emerge as a powerhouse of commercial production and assembly is its ability to attract businesses to relocate and re-establish production bases.

Two economists Shirley Shen and Aidan Yao said that, in addition to the wave of supply chain shift from developed countries to the community of developing countries, previous AXA research also showed that manufacturing profits The low level caused the world's leading multinational corporations to start migrating out of China in recent years.

The reasons indicated are that China has a rapidly growing economy, increasing labor costs, rapidly increasing production operating costs or recently trade tensions with the US, along with With the impact of the COVID-19 pandemic, the wave of production shift is accelerating faster and faster.

At the end of 2018 and 2019, Samsung also closed two large phone assembly plants in China, moving to Vietnam, so that half of the leading handsets of this Korean electronics group were assembled. in Bac Ninh and Thai Nguyen.

Leading fashion, apparel and footwear supply chains, such as Nike and Adidas, which recently decided to move their production bases out of China, have also chosen Vietnam as a safe haven.

In addition, many of the world's leading technology giants such as Google, Microsoft, and Intel, have also moved or are in the process of converting parts of their production lines to Vietnam.

Can Vietnam become a "world factory" to replace China?

According to Mr. Aidan Yao and Ms. Shirley Shen, although Vietnam is a popular destination for global supply chain relocation, there is nevertheless the potential for this Southeast Asian country to become "the world's new factory" " or "new global factory" is unlikely.

The research team pointed out: “The size of the economy is an important issue when it comes to forecasting whether Vietnam is able to replace China's position in the global supply chain or not. Compared to the world's second largest economy, Vietnam's economy is actually much smaller - only 1/5 of China's GDP and 1/5 of China's population as well as the total existing productive workforce.

In addition, Vietnam's manufacturing output accounts for only 0.3% of the total global output, while China's accounts for 28%.

Other comparisons, including research and development (R&D) spending, infrastructure construction, rail lines, stock values, and power generation capacity, are all significantly different, creating a gap. large gap in size between Vietnam and its giant neighbour.

Vietnam first needs to beat two adjacent Chinaese provinces Guangxi and Yunnan, both have just less than half of Vietnam's population with much bigger GDP than Vietnam, and both are among the poor provinces in China.

Yunnan-province-China.jpg
 
Last edited:

Viva_vietnamm

Active member
Moderator
Vietnam Moderator
Messages
98
Reaction score
63
Nation of residence
Vietnam
Nation of origin
Vietnam
Vietnam first needs to beat two adjacent Chinaese provinces Guangxi and Yunnan, both have just less than half of Vietnam's population with much bigger GDP than Vietnam, and both are among the poor provinces in China.

Yunnan-province-China.jpg
SO, how Guangxi and Yunnan still make money when Samsung, LG , auto part-tire factories etc left them to VN plus power crisis in CN now ?? By creating more Evergrande companies there ?? :LOL:
 

beijingwalker

Experienced member
Messages
4,651
Reaction score
1,065
Nation of residence
China
Nation of origin
China
SO, how Guangxi and Yunnan still make money when Samsung, LG , auto part-tire factories etc left them to VN plus power crisis in CN now ?? By creating more Evergrande companies there ?? :LOL:
Now Chinese domestic market is the world biggest and China is moving to a consumption driven economy, every industry is moving up the value chain with more value added production, this is way trade is booming in recent years.
 

beijingwalker

Experienced member
Messages
4,651
Reaction score
1,065
Nation of residence
China
Nation of origin
China
Now tourism is the pillar of Yunnan's economy, the biggest disadvantage of Yunnan is it is a landlocked province, it's why it is still one of the poor provinces in China.

Yunnan-Industry-Economics-and-Supporting-Business-Policies.jpg


Traditionally, Yunnan has eight key industries, these are:

  • Modern plateau agriculture;
  • Cultural tourism;
  • Modern logistics;
  • Information technology;
  • Biomedicine and healthcare;
  • Foods and consumer goods manufacturing;
  • New materials industry; and
  • Advanced equipment manufacturing industry.
 

Viva_vietnamm

Active member
Moderator
Vietnam Moderator
Messages
98
Reaction score
63
Nation of residence
Vietnam
Nation of origin
Vietnam
Now tourism is the pillar of Yunnan's economy, the biggest disadvantage of Yunnan is it is a landlocked province, it's why it is still one of the poor provinces in China.

Yunnan-Industry-Economics-and-Supporting-Business-Policies.jpg


Traditionally, Yunnan has eight key industries, these are:

  • Modern plateau agriculture;
  • Cultural tourism;
  • Modern logistics;
  • Information technology;
  • Biomedicine and healthcare;
  • Foods and consumer goods manufacturing;
  • New materials industry; and
  • Advanced equipment manufacturing industry.
So, the way to develop the economy between VN and Yunnan are different now, we focus on attracting more FDI, more Green and High tech factories, more R&D center like Samsung center, trying to build our own factories and R&D center and try to sell more VInfast cars, EVs to EU-US while Yunnan is focusing in tourism thanks to big CNese domestic market.

Yunnan's development way is unstable, easy toget hurt during pandemic while VN's development way is stable and will help VN to get rich like Japan or S.Korea
 

Viva_vietnamm

Active member
Moderator
Vietnam Moderator
Messages
98
Reaction score
63
Nation of residence
Vietnam
Nation of origin
Vietnam
Many "big guys" in the electronics industry continue to invest in Vietnam

Phuc Minh - Many "big guys" in the electronics industry continue to invest or expand production in Vietnam through large projects. Bac Ninh, Hai Phong, Bac Giang, Thanh Hoa and Da Nang continue to become the localities receiving huge investments from these FDI projects…. This information was announced by Navigos Group, a corporation providing human resource recruitment services in the recently released report on the recruitment demand for mid- and senior-level personnel in the Vietnamese market in the third quarter of 2021, forecasting the trend. recruitment direction in the fourth quarter of 2021 and the beginning of 2022.

MANY BIG ENTERPRISES CONTINUE TO INVEST AND EXPAND PRODUCTION

According to a report by Navigos Group, the market is seeing many large enterprises in the electronics industry continue to invest or expand production in Vietnam through large projects. In which, there are projects to build large research centers (Research & Development - R&D). Bac Ninh, Hai Phong, Bac Giang, Thanh Hoa and Da Nang continue to become the localities receiving huge investments from these FDI projects. Some businesses in the North in this segment, due to effective Covid-19 prevention and control measures, still maintain good production activities.

There was even a slight growth due to receiving many production orders from other branches that are affected by Covid-19.

Besides, the market also observed a large recruitment demand for candidates who know Chinese due to the shift of businesses from China to Vietnam.

Also because the impact of Covid-19 is less than in the South, most of the textile enterprises in the North are still maintaining good production at the moment. Many businesses have more orders from other regions in Asia to move to Vietnam, because these regions have not yet controlled the disease well. Therefore, large and reputable textile and garment enterprises are doing very well with current orders.

There are companies that have received orders until April 2022 and still need to recruit more workers. Some companies say their profits have even doubled in the past. BUSINESSES HAVE A DEMAND TO INCREASE RECRUITMENT The hiring forecast may increase due to increased orders from some businesses, but not too much. In addition, if businesses hire, most of them will be to replace employees who have quit their jobs and strengthen the team with positions that need high skills and techniques. Positive recruitment signals also appear in the banking industry, when units in this industry are racing to transform digitally, so the demand for recruiting high-quality personnel is still increasing. Accordingly, not only large-scale banks, smaller banks and a number of securities companies have also planned and invested in the transformation, establishing Project Committees/Conversion Blocks. Therefore, the demand for personnel at all levels for information technology and digital transformation positions continues to increase, especially for the positions of application development, technology development, transformation management, administration. and data analytics, digital marketing and business.

Navigos Search's forecast shows that this digital transformation race is still going on for banks and companies with sustainable resources and strategies, so the demand for the above-mentioned high-quality human resources is high. still increase. Meanwhile, the electricity - electronics, mechanics and furniture industries in the South decreased by 70% due to the temporary closure of the factory. Due to the strong outbreak of the Covid-19 epidemic in Ho Chi Minh City and neighboring provinces, businesses in the electrical - electronic, mechanical and furniture manufacturing sectors faced many difficulties. Businesses that want to maintain operations need to implement the 3T policy, leading to costly expenses, causing many businesses to choose to temporarily close so that when the epidemic is under control, they will reopen.

Similarly, many FMCG and retail businesses will postpone recruitment and stop hiring in the fourth quarter of 2021. The main reason is that businesses focus on disease prevention, so production and business activities are interrupted or owners remain at a low level. Candidates in this field, affected by Covid-19, are not open to new opportunities to ensure job safety. Therefore, the market is still short of potential candidates for the positions that are currently being recruited. In the fourth quarter, businesses in the retail industry are gradually reopening, and recruitment demand is forecasted to increase slightly in early 2022. Businesses in the commercial consumer goods industry are still recruiting, However, it is forecasted that in the fourth quarter, recruitment demand may decrease slightly compared to the third quarter.

 
Top Bottom