bookmark_borderCould Made in Vietnam Challenging Made in China

As a neighboring country on China’s southwestern border, Vietnam has recently made great progress in manufacturing. In October 2017, Vietnam reported GDP growth of 7.46% in the third quarter of 2017, surpassing the growth rate of India and China in the same period and ranking first in the world. Will Vietnam be the next economic miracle?
Today, Vietnam is in the golden age of demographic dividend, and a large number of cheap labor force promotes rapid economic growth. With its low Labor costs, Vietnam is attracting a shift in global manufacturing. Vietnam not only has lower labor costs, but also lower land, energy and tax costs than China. Vietnam receives a lot of manufacturing capacity from China, and Nike, Samsung, LG and even Intel have set up factories in Vietnam.
Although parts of China’s manufacturing industry have been gradually transferred to Vietnam, it is not realistic to say that Vietnamese manufacturing will completely replace Chinese manufacturing. The first is the completeness of industrial chain and supply chain. China’s manufacturing industry now has the most complete supply system of industrial chain in the world. China can provide supporting services for the whole industrial chain in the shortest time, but Vietnam does not have such a basis at present. Second, infrastructure. Despite its rapid economic growth, Vietnam still lags behind China in infrastructure construction.
Compared with China, the mode of manufacturing in Vietnam is the mode of processing with supplied materials. In addition to the workers and the origin, other Vietnamese elements are less. There are no strong manufacturing brands like Huawei, Midea and Gree in Vietnam.
Although made in Vietnam cannot replace made in China completely in the short term, the sudden rise of made in Vietnam and the large-scale migration of enterprises in recent years still sound alarm bell to Chinese manufacturing industry. Made in China faces more challenges.