Vietnam, the first choice for Chinese manufacturing, Yangcheng Lake

V car world

2024-05-05 09:52Published in Guangdong

文 | teafox

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Is there a local car brand company in Vietnam?

That's right, it's VinFast, whose stock price has soared since its listing on the NASDAQ stock exchange on August 15, 2023. On August 28, it reached $82.35 per share, and its market value was as high as $191.2 billion.

You must know that Vietnam's GDP is only 400 billion US dollars, equivalent to 2.2% of China's, with a population of 100 million, and a per capita GDP of 4,000 US dollars, which is 35% of China's.

越南头号财阀Vingroup创办人范日旺(Pham Nhat Vuong)

Phạm Nhật Vượng, the founder of Vietnam's largest chaebol Vingroup group, was born in 1968 and is originally from Hanoi. Fan Riwang was gifted in mathematics and was awarded a scholarship to a Soviet university. Later, he opened a Vietnamese restaurant in Kharkiv, Ukraine, and finally found the first pot of gold by selling instant noodles, and returned to Vietnam in 2000 (32 years old) to do real estate and become the richest man. Today, VinGroup is involved in real estate, hospitals, universities, office buildings, resorts, automobiles and other industries.

Landmark 81, a landmark building in Ho Chi Minh City, is the tallest building in Vietnam, the second tallest building in Southeast Asia, and the 18th tallest building in the world

The reason why VinFast can build cars is that it has a complete supply chain in China: Jinbei Electric (new energy enameled wire), Haosen Co., Ltd. (flat wire field), Kotei Information (in-vehicle communication), Inbol (power system), Aotejia (automotive thermal management), Shenzhen Huaqiang (electronic components), Guoxuan Hi-Tech (joint venture battery factory), JEE Technology (electric drive system products), Baolong Technology (corner radar), Neusoft Group (intelligent cockpit), etc. 

VinFast even produces VinBus, an electric bus that also comes from its northern neighbor, China. Unfortunately, VinFast sales are dismal, the Vietnamese people are shaking their heads about its quality, and the charging infrastructure is not perfect, after all, Vietnam is still the world of diesel locomotives and automobiles.

Some netizens commented that the design of Vinfast came from Shanghai college students, and the chassis was supplied by CATL, without any evidence

According to the World Bank, Vietnam's imports and exports accounted for a whopping 185% of GDP in 2022 – compared to about 38% of GDP in China and 27% in the United States. Some other manufacturing powers, Japan (47%), South Korea (96%), and Germany (99%), are far inferior to Vietnam.

In absolute terms, Vietnam's total imports and exports in 2022 amounted to US$730 billion, second only to Guangdong and Jiangsu, and more than most of China's provinces.

The huge scale of import and export, although the data is beautiful, but behind the figures, there are mixed blessings. On the one hand, the import and export trade is very active, indicating that the economic development is fast, on the other hand, Vietnam's industrial chain is incomplete, the manufacturing industry is not resilient enough, the industrial categories are not complete, and the dependence on foreign countries is too high, which is greatly affected by the world situation.

Although the per capita GDP of Chinese is only 13,000 US dollars, compared with other developing countries, China's local supply chain is extremely strong. This is the so-called "industrialization dividend", Vietnam also has an industrial system, but it is completely different from China, and the daily necessities of the grassroots people, from slippers to electrical appliances, to various snacks, and even the shrines worshiped by every household, are almost all imported from China. The reason is that Vietnam's domestic manufacturing industry is almost monopolized by foreign capital, and it can produce international brands on the basis of OEM, but it cannot produce the ordinary products that the people of Vietnam need most.

Essentially, Vietnam is a huge Yangcheng Lake. (A half-joking statement is that the local production of the most famous hairy crab in Yangcheng Lake is limited, and merchants often bring in foreign crabs into Yangcheng Lake to pretend to be local crabs to raise the price, also known as bathing crabs, as a metaphor for Vietnam's goods are made overseas, especially in China, or as a middle ground for China's exports to Europe and the United States)

The author believes that the reason why China is so big is that China's industrial production capacity far exceeds the market capacity, and China's iron and steel output is the world's first, more than the second, third, and fourth combined; cement production is the world's first, accounting for half of the world's total output; electrolytic aluminum production is the world's first, accounting for more than 65 percent of the world's total output; coal production is the world's first, accounting for half of the world's total; chemical fertilizer output is the world's first, accounting for 35 percent of the world's total output; and China's industrial output value has surpassed that of the United States, Japan, Germany, Canada, India, and Brazil combined.

At the peak of the Soviet Union, the industrial output value was far inferior to that of the United States, and China crushed the West with the strength of one country, Tesla CEO Elon Musk said that if there were no tariff barriers, China's auto industry would crush the world.

Mexico, Uzbekistan, Thailand, Vietnam and other countries are all potential partners of China, and so far, Vietnam and Mexico have made the fastest progress. Vietnam is a better choice than Mexico:

First of all, the scale is reasonable. It is too big, for example, India, which claims to be the five constants of YouTube, and it is difficult to get it. It's too small, and there's not enough room for development. Vietnam's population of 100 million is the most reasonable.

Secondly, the distance advantage. Vietnam is a neighbouring country with access to railways and roads, and in the future, high-speed rail.

Again, national differences. The Vietnamese, who had experienced French colonization, seemed to lack the determination and execution to work hard compared to the Chinese.

Such Vietnam is the first choice for Chinese manufacturing.

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