In recent years, many overseas companies have taken root in China, but as China's economy continues to grow and labor costs gradually rise, some multinational companies have begun to turn their attention to Vietnam, an emerging manufacturing paradise. The opportunities here stem from several key factors that cannot be ignored.
The first is Vietnam's demographic dividend. Looking at this country of nearly 100 million people, about 56% of the workforce is hardworking young and middle-aged people. These young hands earn only about $1.50 an hour, compared with the average salary of Chinese workers who earn as much as $3. This makes finding a manufacturing base in Southeast Asia a rational choice, which not only reduces labor costs, but also gains a foothold in the global competition.
Secondly, Vietnam's preferential tax policies are also remarkable. In order to attract more enterprises to invest in building factories, the Vietnamese government has developed a series of tax incentives to seize opportunities in the highly competitive manufacturing sector. The implementation of these policies has prompted some companies that previously established in China to consider relocating factories to Vietnam to enjoy more tax breaks.
Vietnam's unique geographical location also provides strong support for it to attract foreign investment. Vietnam, which geographically borders the mainland Guangxi, Yunnan and other provinces, is convenient for sea-land combined transportation, provides convenient conditions for import and export trade, and brings great convenience to the production process of enterprises.
In this context, Vietnam has ushered in an influx of a large number of international enterprises in a short period of time, including well-known brands such as Samsung, Canon, Adidas, Nike, and Foxconn. Even recently, BYD announced that it had signed a factory construction contract with Vietnam, which shows that Vietnam's manufacturing industry is developing rapidly.
However, Vietnam, which relies on labor-intensive industries to start, also faces some difficulties in economic development. Although it has achieved some economic growth in a short period of time, Vietnam, which lacks technical support, has fallen into a development bottleneck. Vietnam's financial report data disclosed that exports fell by 11.9% year-on-year in the first quarter of 2023, and in just one month, exports fell by as much as 17%, and more than 40,000 enterprises across the country had to stop production. After experiencing the economic "spring breeze" of 2022, Vietnam is now facing the threat of financial crisis.
For the sustainable development of enterprises, the importance of technical support is self-evident. However, Vietnam's technological level is far less than that of the mainland, which is actively undergoing industrial transformation and understands that technology is indispensable for the country's prosperity. In order to break the technological monopoly of Western countries, the mainland has achieved a qualitative leap in many fields. Whether in the aerospace field, Continental's domestic large aircraft have won 1,200 international orders and are competing fiercely with Boeing in the United States. In the industrial field, Continental regained the international discourse with 0.015 mm hand-torn steel technology, demonstrating the strong strength of technological innovation.
In the face of the rapid rise of Southeast Asia's manufacturing industry, there is a view that Vietnam is expected to replace the mainland and become the new "world factory". However, with the obstruction of Vietnam's low-end industrial exports and the withdrawal of foreign investment, Vietnam's dividend era is gradually disappearing. In contrast, the mainland has long since transformed from a labor-intensive industry to a high-tech industry. The mainland has a complete industrial chain, broad market prospects, and countries around the world are deeply dependent on "Made in China" products, so it is almost impossible for Vietnam to replace the mainland's position in the global industrial chain.
In general, Vietnam's economic downturn is mainly affected by weak demand in the European and American markets, and the overall downward trend is shown. Many companies have had to lay off workers to save money, and some have even had to leave Vietnam. It also reveals that the model of relying solely on foreign trade orders to boost the country's economy is doomed to be unsustainable. In sharp contrast, the reputation of mainland manufacturing has proudly spread to the world and has been recognized by more and more countries. Tesla, BMW and other foreign companies are optimistic about China's development prospects and have built factories in China to expand production.
Undoubtedly, in the new global pattern, technology and innovation have become the key to national prosperity. Vietnam in
This economic crisis is quite tight precisely because of the lack of innovation-driven and high-tech support. However, the mainland is actively responding to challenges and continuously strengthening its independent innovation capabilities. After experiencing global turmoil, trade turmoil, and the blockade and suppression of technology by Western countries, the mainland has gradually realized that national prosperity not only depends on industrial transformation, but also needs the blessing of technology.
In this information age, technological innovation has become the core of national competitiveness. Mainland is proud of "Made in China", not only making continuous breakthroughs in the field of manufacturing, but also walking in the forefront of high-tech fields such as digital economy and artificial intelligence. Not only that, in terms of environmental protection and green industries, the mainland is also trying to catch up, putting forward a series of green development goals and policies to cope with global change and the needs of sustainable development.
The great progress in the technical level is also an important factor in attracting foreign investment back to the mainland. Tesla, BMW and other multinational companies have successively set up factories in China, not only because of China's huge market potential, but also because of China's huge potential in technological innovation. China is becoming a global center of scientific and technological innovation, whether it is 5G, artificial intelligence, electric vehicles and other fields, the mainland is actively promoting the development of world science and technology.
Therefore, although Vietnam was once regarded as a strong competitor to the "world's factory", Vietnam's disadvantages have gradually become apparent in the process of global economic changes. In the face of the wave of technological innovation and the torrent of industrial upgrading, Vietnam must realize that the advantage of labor costs alone is no longer enough to maintain long-term prosperity.
To sum up, Vietnam has indeed attracted a large number of international enterprises to build factories for a period of time, and has gained a certain momentum of development with the help of factors such as demographic dividend and tax incentives. However, such