WATCH: China's firms battle for talent and territory in Vietnam amidst US-China trade war
To bypass tariffs, Chinese firms supply components to Southeast Asia nations, who export to the US out of the ten ASEAN member states. Vietnam is expected to be the largest beneficiary of the trade diversion, while also being hailed as the one country racking up real wins in the US-China trade war.
Vietnam’s Prime Minister Nguyen Xuan Phuc stated that Vietnam’s GDP is expected to grow beyond 6.8% this year, creating a robust export market with access to a steady stream of foreign investment. However, as the US-China trade war shifts, the influx of factories moving out of China and into Vietnam, some Chinese manufacturers are urging others to think twice before relocating.
In the small province of Binh Duong in South Vietnam, booming investment has resulted in Chinese Businessman Weng Caibing’s construction company increasing by 50% revenue. However, this has resulted in difficulty in finding workers, especially skilled Chinese-Vietnamese translators.
In a recent interview, Weng told the South China Morning Post “The largest amount of Chinese investment has caused malignant competition for labour. 5 million Vietnamese dongs (US$ 213) per month could get me a good translator before, but now I have to pay 15 million dongs (US$ 638) and I'm struggling to find the right person.”
Weng’s construction company is situated a one-hour drive from Vietnam's financial centre and largest city Ho Minh City, with thirty new industrial parks in the region, each catering to foreign firms who are moving south from China. With firms seeking alternatives to China to avoid increased tariffs imposed by US President Donald Trump, many are trying to escape higher prices for land and labour.
The magnitude of the shift from China to Vietnam is hard to measure, which is mainly due to multinationals that are keeping their moves discreet to avoid upsetting delicate government and supplier relationships in China. While the notion of Vietnam is unrealistic according to business leaders, many believe that even though no other country has what China is capable of, Vietnam can still acquire some of it.