VOV.VN - Indian news website LiveMint has published an article providing details on progress made by both Vietnam and Bangladesh in terms of the global race to replace Chinese exports and become new production hubs for international investors.
The article outlines how the nation has earned recognition in its bid to become an Asian Tiger, an accolade of rapid economic development that has been held by the Republic of Korea, Taiwan (China), and China itself over the past several decades.
The country’s exports witnessed a rise of 18% on-year in September, largely through an increase of 26% in terms of exports of computers and components, along with a 63% jump in machinery and accessories exports during the third quarter. Most notably, more than half of Samsung’s smartphone production originates from the nation.
Most notably, the publication states that the country is leading the global race to replace some of China’s export production, adding that it is now grappling with problems caused by success.
Despite the nation’s outlook looking “particularly strong," a banker based in Ho Chi Minh City states that the current challenge is ensuring that Vietnamese ports, roads, and airports are able to keep up “with the next US$100 billion in foreign direct investment (FDI).”
Ruchir Sharma, an emerging markets strategist from Morgan Stanley, dubs the country as the “next Asian Miracle” and points out that FDI averages more than 6% of Vietnamese GDP, the highest ratio in comparison to any emerging country.
Bill Stoops, chief investment officer of Dragon Capital based in Ho Chi Minh City, the largest listed equity investor nationwide, says Vietnamese exports have undergone dramatic changes, adding that 10 years ago it largely focused on crude oil and agriculture. Indeed, last year saw fish as the only non-manufacturing product among its top ten exports.
“Also, about 65% of the country is still rural so there is an endless supply of people willing to move to cities. I am not concerned about Vietnam’s ability to accommodate more FDI," said Stoops.
The article describes how the past four weeks have provided evidence from India and Indonesia that both Vietnam and Bangladesh are in the race to surpass China’s role as the world’s factory.
It states that the China + 1 strategy to manage global production a decade ago as led to the Chinese Government forcing up the wages of factory workers, therefore opening up fresh opportunities in other markets.