Vietnam is expected to replace China as the factory of the world in the near future
Due to greater opportunities with cheaper prices on land purchase rights, labor wages and operating expenses of factories and warehouses, Vietnam could replace China as factory in the world in the near future.
While outbreaks of Omicron in Chinese manufacturing hubs, such as Guangdong province and Shanghai, have disrupted supply chains, Vietnam’s first-quarter economic figures appear to show bright prospects amid the pandemic, a source said. reported the Global Times.
Vietnam’s economy grew by 5.03 percent in the first quarter of 2022, compared to the same period last year, overtaking China which grew by 4.8, according to Vietnam’s General Statistics Office. %. Moreover, Vietnam’s foreign trade reached $176.35 billion in the first quarter, up 14.4 percent year-on-year. By comparison, China’s foreign trade in the first quarter rose 10.7% in yuan terms.
Moreover, foreign investors and other foreign companies are injecting money into the Vietnamese market. Recently, Vietnamese media reported that business tycoon Li Ka-shing invested billions in Vietnam’s infrastructure after pulling out of the UK, the Global Times reported.
As Southeast Asia eases its epidemic restrictions and China continues to struggle with Omicron surges in its major cities, a new wave of headlines has emerged on whether factory orders will continue to emerge from China and if China is expected to have a sense of crisis as global manufacturing may wean itself off reliance on the world’s second largest economy and look to countries like Vietnam.
China began its reform and opening up in 1978. Vietnam followed in China’s footsteps and launched its own market reform known as “Doi moi” in 1986. Over the past decades, economic growth of both countries was remarkable.
But the eruption of a trade war between the United States and China in 2018 accelerated a fourth wave of industrial chain shifts, with countries like Vietnam and Mexico emerging as the big winners in trade disputes.
Vietnam’s trade with the United States has increased significantly since 2018. The latest data shows that Vietnam’s trade surplus with the United States increased from $63 billion in 2020 to $81 billion in 2021, reaching a record high, British media reported.
For the foreseeable future, Vietnam will remain an attractive market for foreign investment and a destination for supply chain diversification.
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