Workers at an electronic spare part manufacturing plant in Vietnam (Illustrative image. Source: VNA) Hanoi (VNA) – France’s Le Temps newspaperon July 19 ran an article describing Vietnam as a new factory of the world.
According to the article, low wages, tax incentivesand free trade agreements have facilitated Vietnam’s exports to foreignmarkets.
It highlighted the spectacular growth of industrialparks in Vietnam, but noted that the dependence on export and foreign directinvestment (FDI) would make the country vulnerable to trade disputes betweenthe US and other trade partners such as China and the European Union.
Meanwhile, the UK’s Inquirer.netalso reported that Vietnam has switched from being an agricultural economy toone of the brightest manufacturing hotspots in Southeast Asia, citing thelatest report from Jones Lang LaSalle, one of the world's leading real estateservices firms.
It quoted the report assaying that “This phenomenal growth can be attributed to Vietnam establishingitself as an export-driven economy, dedicated industrial and economic zones,numerous free trade agreements, strong economic growth and a young, plentiful,low-cost workforce.”
All these initiativeshave led to significant investment by large foreign companies.
The best case studyis Samsung, which has reportedly invested over 17 billion USD in Vietnam.
This has provided confidence to many other foreigncompanies from around the globe to set up operations in the country.
According toInquirer.net, one of the challenges for Vietnam over the next few years will bethe ability to adapt and embrace the inevitable disruption and changes broughtabout by technology and automation, now commonly known as industry 4.0.
In order for Vietnamto enter the next phase of the industrial/logistics cycle and become morecompetitive than other countries in the neighborhood, it is criticallyimportant that significant expenditure continues on infrastructure, includinghighway networks, deep-sea ports and upgrade of utilities, including renewableenergy.-VNA
VNA
