Vietnam’s emergence as a new manufacturing hub
For many companies, solely relying on China for production outsourcing was no longer the best option due to several reasons. This included the U.S.-China trade war, the COVID-19 pandemic, and the increasing manufacturing costs in the East Asian nation. As a result, Vietnam emerged as a new candidate for manufacturing, thanks to its low labor and overhead costs, as well as its policies for attracting foreign direct investment (FDI). Additionally, the country boasts access to important trade routes via its transportation network, especially maritime transport. To further support the manufacturing sector, the Vietnamese government has been supporting the establishment of over 400 industrial parks and so-called economic zones with favorable conditions for investments in designated provinces across the country.In 2021, despite the impact of the COVID-19 pandemic on the global economy, Vietnam still recorded over 248 billion U.S. dollars of FDI in its manufacturing sector, equaling almost 60 percent of the total investment of this kind. FDI firms contributed significantly to the total exports from Vietnam, especially regarding high-tech products such as smartphones, computers, and machinery. Local producers, on the other hand, were more active in producing agriculture and fishery or textile products.
