Speaking of international industrial transfer, it is the result of globalization and industrial division of labor. Since the second half of the 20th century, the international industrial transfer has been from Japan, to the Four Asian Tigers, and then to China. It is like a window of wealth that will always open to certain countries at specific times. When talking about the next destination for industrial transfer, there is one Southeast Asian country that cannot be bypassed: Vietnam.
Vietnam has always been a loser image in many people’s minds. However, in recent years, Vietnam has But he has been making a fortune silently. This Southeast Asian country adjacent to China has maintained an economic growth of more than 6% in recent years and has become a popular destination for international industrial transfer.
With a trade volume of US$517 billion, Vietnam has become a “hot potato” for international manufacturers
Vietnam is a typical export-oriented Economy, Vietnam’s total trade reached US$517 billion in 2019, almost twice its GDP. Among them, Vietnam’s footwear, clothing, knitting and other products have experienced relatively strong export growth. These were the products most commonly produced by Chinese factories in the past.
But we also need to know that compared with the “Big Mac” China, Vietnam is too small. Even for these mid- to low-end industries, Vietnam is not as large as China, but it is developing very quickly, and there is a trend of ebb and flow with China.
From the data, Vietnam’s footwear exports reached US$18.2 billion in 2019, second only to China; Vietnam’s clothing exports The value has exceeded 30 billion US dollars, surpassing Bangladesh and becoming the world’s second largest garment exporter.
Especially in the fierce competition between China and the United States, Vietnam has also undertaken most of the orders transferred from China by the United States. By the second quarter of 2019, of the US$31 billion reduction in U.S. imports from China, Vietnam had absorbed US$14 billion, almost half of it.
It should be pointed out that the deterioration of the external environment has only accelerated the transfer of some industries to Vietnam. In fact, this transfer had occurred earlier. For example, in 2009, the production capacity of Nike’s Vietnam foundry has surpassed that of China. Today, 50% of Nike and Adidas are produced in Vietnam, while only 20% are produced in China.
In recent years, Vietnam has become a hot spot in the eyes of international manufacturers. In 2019 alone, foreign investors’ investment in Vietnam reached a total of US$38 billion, a record high in ten years.
Not only mid- to low-end industries, Vietnam now also undertakes some high-end manufacturing industries. In the past two years, many companies have announced investment and construction of factories in Vietnam. In addition to Uniqlo, Hasbro, Jiansheng Group and other companies involved in the clothing and footwear industry, they also include Intel, Samsung, Sharp, China’s Goertek, and Luxshare Precision. Technology companies involving chips, mobile phones, and screens have announced investments and construction of factories in Vietnam.
For example, Samsung has moved almost all its mobile phone production capacity from China to Vietnam. In 2018, 50% of the mobile phones sold by Samsung were produced in Vietnam, and one-third of its electronic products were produced in Vietnam. One of them is produced in Vietnam; in 2019, Goertek invested US$260 million in an industrial zone in Vietnam; now Vietnam is striving to become a new manufacturing center for the global electronics industry. It can be said that Vietnam is taking the same path that China has taken.
In the face of industrial transfer, China may have three major countermeasures
Of course, there is only one Vietnam, which is definitely not an opponent of Made in China . However, we also need to know that in recent years, the United States, Japan, India, and Australia and other countries have clamored to build an exclusive international industrial alliance called the “Economic Prosperity Network”; and in addition to Vietnam, there are other Southeast Asian countries, India and other potential industry transfer destinations , Therefore, we should also take precautions and make countermeasures.
First of all, the most important thing is industrial upgrading. When international industries were transferred to China, Japan and the Four Asian Tigers all carried out industrial upgrades to maintain the competitiveness of their manufacturing industries. Therefore, industrial upgrading is also the only way for China. In fact, China has been taking action in recent years, such as implementing the “Made in China 2025” strategy and increasing investment in “new infrastructure” such as 5G and artificial intelligence.
Secondly, actively expand opening up to the outside world. China is the world’s largest single country market with a population of 1.4 billion. This is a “big cake” that most international manufacturers cannot ignore. Therefore, as we expand opening up to the outside world, international manufacturers will not easily transfer their industries out of China, and at the same time, they will even increase investment in China. In fact, China is becoming a “safe haven” for cross-border investment. In the first nine months of this year, it attracted more than 100 billion US dollars in foreign investment, achieving “regular status”.
In addition, strengthen economic and trade cooperation with other countries. China’s initial victory in fighting the epidemic has consolidated China’s position in the global supply chain to a certain extent. At a time when global trade is shrinking, China is “outstanding”. In the first nine months of this year, China’s foreign trade increased by 0.7% year-on-year. Now that China’s economy has resumed growth, strengthening economic and trade cooperation with other countries will not only allow them to “take a ride” on the Chinese economy. ”, we can also go further.�Higher market share of Chinese manufacturing.
So, in this way, it will promote China’s transformation from a “manufacturing power” to a “manufacturing power”, which will not only consolidate China’s status as a “global manufacturing center”, but also enable it to face the most severe challenges in the future. You can also feel more confident in bad situations.
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