The US-China trade war is showing no signs of slowing down. At the moment, the US has plans in place to increase the already exorbitant tariffs it has placed on Chinese imports. The Chinese, on the other hand, has retaliated with tariffs of its own. No one has any clue as to when this ‘madness’ will come to an end. The question is, can Vietnam use this brilliant opportunity and replace China as a manufacturing hub?
It’s no news that China is the juggernaut of manufacturing. Most of America’s big conglomerates outsource their manufacturing to China, where labor is more affordable. Now, the US-China trade war may have strained the relationship and economies of both countries, but it has also presented an opportunity to other countries. With the advent of the trade war, it is safe to say that businesses are being seriously affected by the new costs they now have to deal with. The solution, move to other countries.
One of such countries that are uniquely positioned to receive businesses from China looking for a new home, is Vietnam. Making the ‘Vietnamese proposition’ much more attractive is the fact that labor costs in Vietnam are way cheaper than in China. Also, Vietnam shares a border with the Asian giant, companies won’t have to significantly alter their manufacturing and distribution pipeline should they move to Vietnam. Companies like Samsung and even major Chinese brands have moved production to Vietnam in order to stay in the green and avoid outrageous tariffs. Currently, most of Vietnam’s exports go to the US, free from the tariffs imposed on Chinese products. So, if you think about it, it is probably a no-brainier for companies to move their operations to Vietnam and other parts of South-East Asia where labor is cheap.
The new influx of major companies to Vietnam has in no small way affected its economic growth. The Vietnamese economy is indeed ‘profiting’ from US’s dispute with China. The mandate of the Vietnamese government is now to upgrade its infrastructure to keep up with the demands of its fast-growing economy.
Another key industry in Vietnam that has significantly been positively affected by the new economic boom, is the tourism industry. The number of international tourists in the first half of 2019 saw a 7.5 percent increase over that of last year. Vietnam also made about $14 million from tourism alone in the first half of 2019. Now, the onus is on the Vietnamese government to take the present opportunity to grow its infrastructure to cater to the ever-growing number of tourists and workers who come to Vietnam. International harbors, airports and housing are among some of the areas the Vietnamese government hopes to make improvements in.
The Vietnamese tourism industry has the potential to be a stable ‘money maker’ for the Vietnamese economy long after the effects of the US-China trade war has died down. The country of Vietnam possesses some of the richest cultures and histories in the world. The northern part of the country is blessed with lush mountains while the south is home to exquisite beaches. If you are in search of a holiday destination, Vietnam should be on your list.