Vietnam Becoming New World’s Factory

Certainly, due to Asia’s growth advancement coupled with improved business environment, Vietnam can become a new global factory. Vietnam’s state movement has pursued an active trade policy that has rendered it to become Asia’s new hub in manufacturing. The country’s economic position has been hyped as the main beneficiary of China and the United States trade war as businesses are increasingly relocating their businesses in Vietnam in order to re-establish their supply chains (Edwards & Phan, 2015). If the Southern Asian states are able to replace China to become a new factory of the world, it has turned out to be a heated topic of discussion (Collins, 2019). In fact, the GDP of Vietnam has recently recorded an increased rate of 6.79 during this year’s first quarter, mostly attributed to advanced growth in the manufacturing and processing industries. Although Vietnam’s economic growth had decreased from 7.31% during the previous quarter, the state’s economy is more likely to advance significantly during the period.

In the recent past, the country attracted the capacity transmissions from a number of manufactures in garments, textile as well other low-ended sectors, particularly those that have fled China as a result of increased labour costs (Edwards & Phan, 2015). In fact, the economic position of Vietnam had surpassed that of China based on 2010’s global economic reports, being the first time it became a leading producer of popular products such as Nike shoes (Nguyen, 2017). Today, the country is well-positioned to become a new regional processing and manufacturing hub across a number of industries (Collins, 2019). To introduce highly technological manufacturing businesses back to the United States, the administration of President Trump has adopted a series of processes and actions, comprising of trade wars with developed countries such as China, with the aim of reshuffling international supply chains.

Multinational-based businesses have also been shifting their operations to states, which are characterized by low costs like Vietnam (Gates, Noerlund & Vu, 2014). This is while there is partial cost pressures resulting from tariffs imposed by the United States on Chinese exports. Also, Vietnam is set to establish one of the largest industrial processing systems owing to the geographical closeness to China. More importantly, low labour costs accompanied by a young population also add to the advantage of attracting most multinational businesses. China’s industrial transformation and upgrading play a significant role in enabling the transition of manufacturing functions to Vietnam (Nguyen, 2017).

Overall, as far as other nations such as China are demonstrating an increased development rate, Vietnam is likely to become the new global factory. This is because the nation has attracted the capacity transmissions from a number of manufactures in garments, textile as well other low-ended sectors, particularly those that have fled China as a result of increased labour costs. Besides, Vietnam is characterised with low labour costs, a fact that makes it a destination for most global factories.

References

Collins, N. T. (2019). Economic reform and employment relations in Vietnam. Routledge.

David South; Writer. (2015). Development challenges, south-south solutions: April 2014 issue: E-newsletter of the United Nations office for south-south cooperation in UNDP. DSConsulting.

Edwards, V., & Phan, A. (2015). Managers and management in Vietnam: 25 years of economic renovation (DOI moi). Routledge.

Gates, C., Noerlund, I., & Vu, V. C. (2014). Vietnam in a changing world. Routledge.

Nguyen, P. (2017). Adventure to the New World: A memoir of a Vietnamese American. River Breeze Publishing.

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