Vietnam is rising as a developing industrial hub of the region (Photo: VietnamPlus) Hanoi (VNA) – India’s e-magazine Stat Trade Times has run a story highlighting Vietnam’s potential to rise as an industrial hub of Asia.
It said that to many, Vietnam is known for its beautiful beaches and delicious fare. But it has become a burgeoning industrial hub, especially for tech and apparel: and the numbers back it up.
The article noted that while parts of Asia are still recovering from the global pandemic, Vietnam’s economy has boomed, reaching an impressive 8% increase in GDP by the last quarter of 2022 – that’s faster than other major regional economies in Asia, including India, Japan and China. Vietnam’s export revenue hit 372 billion USD, up 10% from the year before.
What explains the boom for Vietnam’s industry? Part of the reason is the disruption to supply chains on China, Asia’s largest manufacturing hub, as factories were subject to shutdowns during the COVID-19 pandemic. Companies turned to alternative locations to continue and diversify their production streams, it said.
It underlined that Vietnam has a young and growing population of 97 million, 70% of whom are under 35 – that’s a considerable labour force for the manufacturing industry. And while China’s manufacturing costs have risen to around 6.50 USD per hour, Vietnam’s remain low at less than half the cost (2.99 USD per hour).
Vietnam has great advantages with a coastline of over 3,200km (Photo: VietnamPlus) Vietnam is strategically located along a strip of 3,200km coastline which makes the country, particularly the northern region, an effective location for shipping cargo in and out. The government has been investing in development projects to improve the country’s infrastructure, particularly in the northeastern cities, to create a more attractive travel destination, and ultimately a more connected port and industrial hub, it added.
The article noted that Vietnam is the world’s second-largest manufacturer of tech and apparel, with big brands like Nike, Adidas and Samsung operating across the country. And the disruption caused by the pandemic has seen more companies look to Vietnam. While Apple manufactures the majority of its products in China, it has been diversifying its production in other countries, namely India and soon 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 Vietnam, while Microsoft started shipping Xbox game consoles from Ho Chi Minh City in 2022. Reports have also emerged that Apple’s supplier Foxconn is investing 300 million USD to expand their factories in the North of the country, and Dell, HP, Nintendo and Lenovo are all planning on setting up plants in the Southeast Asian nation as well.
Last year the tech giant announced that it will be producing Apple products, mainly Apple Watches and MacBooks, in Vietnam for the first time (Photo: VietnamPlus) The Vietnamese government has been making strong efforts to make trade easier between Vietnam and the rest of the world. The nation has signed several free trade agreements with the EU, UK and nations across the Asia-Pacific, opening up the country to more trade opportunities, especially to the West, such as the recent shipment of green pomelos we recently delivered to the US.
Another strong driver of trade is the Regional Comprehensive Economic Partnership (RCEP), a trade agreement among the Asia-Pacific nations of Australia, Japan, China, New Zealand, the Republic of Korea and 10 ASEAN member countries.
According to the article, Vietnam is a good choice for foreign companies, allowing them to diversify their supply chains and create a smoother, more predictable flow of goods and productivity./.
