As we all know, “Made in China” has always been a business card of China. It represents the wide coverage and recognition of products made in China, and also reflects the level and influence of China’s manufacturing industry. Therefore, China has always been called the “world’s factory”. In fact, this title can be said to be well-deserved. Because China is the only country in the world that has all industrial categories in the United Nations Industrial Classification, this also means that China has the most complete industrial system in the world.
With the advent of the era of economic globalization, trade exchanges between various countries have become more frequent. In order to expand their own In pursuit of profit maximization, factories in some countries have been opened to other countries. The purpose of setting up factories overseas is for two reasons. One is to enter foreign markets, and the other is to reduce production costs for enterprises.
As we all know, labor costs in manufacturing are the main expenditure, so when some countries build factories overseas, they usually choose countries with low labor costs. Such as Southeast Asia and the rapid economic growth of some developing countries, many people have begun to say that other countries will replace China as a new “world factory” in the future. Among them, Vietnam is mentioned the most because Vietnam’s development looks really good.
As China’s economy continues to grow, people’s income levels are also increasing. At the same time, labor costs are also rising. At this time, Some factories began to withdraw from China and choose to invest and build factories in Southeast Asia where labor costs are lower. Vietnam became their destination. After a Harvard professor predicted that Vietnam would replace China and become the “world’s factory,” talk of Vietnam catching up with China has been spreading.
Vietnam’s GDP has grown rapidly, exceeding 7% for two consecutive years, becoming one of the fastest growing countries in the world; Vietnam has also signed an agreement with the European Union to exempt more than 90% of tariff-related agreements; it has also developed its own 4,000-ton frigates, becoming the world’s fourth largest shipbuilding nation. In addition, Vietnam has made brilliant achievements in attracting investment and enterprise development. According to statistics from relevant Vietnamese departments, in the first half of 2019, there were 67,000 new enterprises in Vietnam, and the total number of enterprise registrations reached 860 trillion VND.
Among the many foreign-invested enterprises in Vietnam, many mainly build factories in Vietnam, taking advantage of local cheap rent and labor to reduce original costs. With the establishment of many factories in Vietnam, exports of “Made in Vietnam” surged by 30%, and the reputation of “Made in Vietnam” gradually became louder in the world and became an “explosion”. At the same time, in order to further attract foreign investment, Vietnam has also introduced preferential policies: “Four exemptions and nine reductions” will be implemented for enterprises with investment exceeding US$300 million, annual sales exceeding US$500 million, or providing more than 3,000 jobs. Special preferential treatment.
Vietnam himself claims that he will surpass China within 10 years. However, if we take a closer look at the characteristics of Vietnam’s development and its recent situation, we will find that it is not easy for Vietnam to replace China. From 2019 to now, many foreign companies investing in Vietnam have begun to withdraw, and the United States and Europe Many countries in the country have also returned products made in Vietnam.
Because with the development of Vietnam’s economy, its original cheap labor costs have gradually increased; in addition, Vietnam’s infrastructure is far less complete than China’s, and logistics and warehousing costs are also quite high. Expensive; at the same time, there is a certain gap between Vietnam and China in terms of labor efficiency, worker quality and cost performance. Therefore, after many foreign-funded enterprises come to Vietnam for a period of time, they find that the comprehensive cost is not much lower than before, and they will naturally “return disappointed.”
In Vietnam, there are no small economic problems. Vietnam relies heavily on foreign investment, has small capital reserves, and is heavily in debt while developing its economy. According to statistics, Vietnam’s debt exceeded US$130 billion in 2019, exceeding 50% of that year’s GDP.
In 2019, Vietnam’s GDP was US$260 billion, while that of neighboring Guangxi Province and China was US$307.8 billion. From this perspective, whether it is to replace China as the “world’s factory” or to catch up with or even surpass China in the future, China’s neighbor Vietnam obviously still has a big gap. </p
