Foreign groups have stepped up their plans to penetrate or expand in Vietnam
While China is struggling with the pandemic and is losing the confidence of foreign investors, its resilience has been proven to make Vietnam an ideal investment and production center for Southeast Asia.
Vietnam has been chosen as the ideal destination for HZO policy, a US-based company, a US-based company that produces protective nano coatings with a notice of opening a production facility. first production in Vietnam in Yen Phong Industrial Zone, the northern province of Bac Ninh.
The country is also rumored to be Apple’s next destination, the iconic U.S. multinational technology for consumer electronics, computer software and online services. Recently, gigantic recruitment announcements are listed in Vietnam on LinkedIn, including a chief executive position based in Hanoi and test engineers in Ho Chi Minh City.
These job announcements add credibility to reports that Apple can increase manufacturing outsourcing for Vietnam, while Foxconn, the world’s largest electronics contract manufacturer and main supplier. Apple, also has a base in Bac Ninh to produce for the technology giant.
Sharing the same trend, other US giants such as Google, Microsoft, HP and Dell have also announced their plans to settle in Vietnam. While Google asked suppliers to calculate the cost of moving some devices from China to Vietnam via road, sea and air after considering the impact of coronavirus on the operation of themselves, Microsoft aims to launch its latest Surface computers and laptops in the country.
HP and Dell are also expected to transfer up to 30% of their notebook computers to Vietnam.
As China gradually loses priority in global production, large-scale international manufacturers are adopting policies to expand China + 1 – with Vietnam emerging as a clear alternative. Clearly in many reviews.
China dominates decline
In a report published last week, global manufacturing consulting firm Kearney pointed out that China is increasingly losing stakes from American companies during the Trump administration, and the main beneficiary of this. are smaller Southeast Asian countries. Along with American companies, this move has also happened to businesses from other major economies.
The coronavirus has stagnated production and logistics worldwide, especially exposing the holes of Japanese companies dependent on China for more than 20% of their spare parts and materials needs. Japan has prepared 240 billion yen (2.23 billion USD) in subsidies for fiscal year 2020 for companies moving production out of China. Consumer product maker Iris Ohyama is set to become the first Japanese company to receive government subsidies to move production out of China as part of a more flexible supply chain effort.
A survey from credit reporting and marketing firm Tokyo Shoko Search Co., Ltd., said 37% of the 2,600 businesses asked to leave China.
Since the start of the US-China trade war, Japanese electronics maker Sharp has been planning to shift production of computers from China to Vietnam to ship goods to the US. According to Japanese TV channel NHK, Sharp is also considering shifting production of multifunctional office equipment to Thailand instead of China.
Meanwhile, it is reported that Nintendo, one of the largest video game developers based in Japan, will also pull part of console production from China to Vietnam.
Across the pond, European leaders and businesses have also considered such moves to reduce their dependence on the Chinese market. Last week, EU Trade Commissioner Phil Philan said the bloc would try to reduce our trade reliance after a pandemic.
Meanwhile, British Foreign Minister Dominic Raab, representing Prime Minister Boris Johnson when he recovered from coronavirus, spoke of economic relations with China, there was no doubt that we could not do business as usual. after the recent crisis after a phone call with G7 leaders.
Raab explained that the pandemic taught the UK the value and importance of cooperation and that the UK could not depend solely on China.
Last year’s US-China trade war triggered the trend of moving production lines from China to Southeast Asia and other markets, but the virus outbreak reaffirmed the risk of supply chain disruption. when the world economy depends too much on a big market.
Vietnam is currently highly appreciated by the international community for strong and timely actions to respond to pandemics while maintaining economic growth momentum and ensuring social security.
In addition, various support packages to rescue the business community, including foreign-invested enterprises, have emerged as a new driving force of foreign capital inflows into Vietnam after the pandemic ended. end.
Members of the European Chamber of Commerce in Vietnam (EuroCham) welcome government restrictions, including Directive No. 11 / CT-TOT of March 4, which directs urgent tasks and solutions to address them. solving difficulties of production and business establishments, extending tax payment time limits and paying land rents, and suspending social insurance payment.
About 75% of businesses surveyed by EuroCham agree that extending tax payments will help them overcome pandemic difficulties.
According to Ousmane Dione, Country Director of the World Bank in Vietnam, if the COVID-19 pandemic is gradually under control in the coming months, Vietnam’s economy will recover relatively quickly thanks to a solid foundation.
The World Bank also believes that the Vietnamese government is determined to curb economic losses from the crisis by taking necessary preventive and treatment measures, in addition to providing financial policies to support the majority of people and businesses to cope with the immediate burden.
In addition, the latest market report of real estate services firm JLL shows that companies that want to diversify their production portfolio outside of China are attracted to Vietnam thanks to its proximity to China, Free trade agreement and the government’s desire to build Vietnam into a manufacturing center in Southeast Asia. These comments are a plus in the eyes of foreign businesses planning to relocate facilities or expand operations outside of China, the report noted.
Shirakawa Satoko, head of English and English speaking businesses of Kizuna JV Corporation, said foreign investment inflows will pour into Vietnam after the pandemic if the country can minimize the damage. The company has accelerated the construction of ready-made space in the Mekong Delta province, Long An Giuoc district with the scale of 80,000 square meters. The construction is expected to end in the fourth quarter of the year to welcome foreign investment, Sat Satoko said.
Asia Times quoted Alexander Vuving, professor at the Asia-Pacific Center for Security Studies Daniel K. Inouye in Honolulu, Hawaii, saying the pandemic was a great opportunity for Vietnam to strengthen its soft power, because It helps broadcast generous behavior towards the international community.
Many analysts are now expecting Vietnam to get the lion’s share of the second wave factory moving group, due to the growing pandemic and anti-China sentiment in the west driven by the perception that China Quoc is primarily responsible for the outbreak.
“Vietnam benefits greatly from this diversification because it’s friendly, while still saving costs for investors from the west” Mr. Vuving said. ‘In many cases, Vietnam will be their first choice when they look around for a reliable alternative.”
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