Vietnam among world’s top 5 factories of the world


India, Vietnam, Thailand, Malaysia, and Bangladesh are stepping up to replace China to become the world's industrial hubs, according to magazine Business Insider of the United States.

The publication outlines that global manufacturing powerhouse China as the world's factory spanned the course of four decades and ushered in an era of globalisation with integrated supply chains.

However, their position as the heart of global manufacturing started to crumble around 2018 after former President Donald Trump launched a trade war against the Asian giant.

“This, in turn, has prompted investors to reassess their geopolitical risks,” Business Insider noted.

It said while some financiers moved parts of their manufacturing facilities out of China at the time, it was the COVID-19 pandemic and subsequently China's zero-COVID policy that drove home the importance of not depending on one country for global manufacturing needs. 

Furthermore, according to the magazine, incumbent President Joe Biden has kept in place many of the elevated tariffs that former President Trump imposed on China. In fact, in October, he imposed export controls on shipping equipment to Chinese-owned factories making advanced logic chips, further burdening an already strained relationship. 

“To navigate this complicated web of US-China trade tensions, multinationals are now more than ever, looking to hedge their business risks,” the magazine stressed.

Business Insider then named five countries which are increasingly picking up China's supply chains, including Vietnam.

According to the US outlet, Vietnam has been undergoing rapid economic reforms since 1986, with these changes yielding significant returns.

It quoted the World Bank’s post in November as saying that the reforms have yielded results which have propelled Vietnam from "one of the world's poorest nations to a middle-income economy” in one generation.

According to the Vietnamese Ministry of Planning and Investment, about 60% of investments went to the manufacturing and processing sector. In 2021, Vietnam attracted over US$31.15 billion in foreign direct investment pledges, more than 9% higher compared to a year ago.

Business Insider noted that key Vietnamese strengths are in the manufacturing of apparel and footwear, as well as electronics and electrical appliances.

“Aside from India, tech giant Apple has already moved some iPhone manufacturing to Vietnam and is also planning to move some of its MacBook production to the Southeast Asian nation,” it added.

“Other companies that have shifted some of their production lines out of China to Vietnam include Nike, Adidas, and Samsung,” the article concluded.