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Goodbye China. Good Morning Vietnam. I Don’t Think So.

Posted in China Business

One of the things we keep hearing is that small and medium sized manufacturing companies that manufacture in or outsource to China will soon be leaving China, mostly for Vietnam. China’s increasing enforcement of its environmental and labor laws, coupled with its rapidly increasing wages and its “dangerous products,” will lead a whole slew of Western manufacturing companies to leave China for Vietnam.

I disagree.

In a post entitled, “Why Vietnam is not the next China. Logistics,” the All Roads Lead to China blog, written by China logistics guru, Rich Brubaker, posits that will not happen because Vietnam “is missing the infrastructure…. specifically its logistics infrastructure.” All Roads sees Vietnam as having a “looong way to go” on this front. He notes that “75% of all exports leaving Vietnam on a plane are garments (39%), footwear (25%), and handicrafts (10%)” and the only reason to export such products via plane is because the seaports are inadequate. 3.137 million TEUS (twenty-foot equivalent units) left Vietnam seaports in 2006 as compared with more than 20 million TEUs from Shanghai alone. Getting goods out of Vietnam is expensive and time consuming.

My own unscientific sampling reveals that in most sectors of manufacturing, Vietnam’s manufacturing capabilities are just not there yet. I have asked around ten of my firm’s manufacturing clients and five or six manufacturing/product sourcing consultants where Vietnam fits in the manufacturing picture. All the manufacturers said Vietnam is not ready to manufacture their product and all the consultants said something along the lines of, “clothing and rubber duckies, yes. Much more than that, no.” This is not to say big companies like Intel will not be establishing their own manufacturing operations in Vietnam, but it does say we should not expect a wholesale transfer of manufacturing from China to Vietnam in anything approaching the near term.

Population is another limiting factor. Vietnam has around 85 million people, as compared to China’s 1.3 billion plus. China has been “the factory to the world” for quite some time, during which time it built up both a physical and a human infrastructure for manufacturing. Despite this, China suffers from a shortage of skilled labor in nearly all manufacturing sectors and in certain of its regions, a shortage of unskilled labor as well. There is no way Vietnam has the human capital to inherit China’s many factories.

Lastly, none of the reasons typically given for a China exodus to Vietnam make all that much sense. Though standing alone, China’s rising wages and increasingly stringent enforcement of laws make manufacturing more expensive in China than in Vietnam, adding in things like transportation charges changes that equation for most manufacturing. Equally importantly, as foreign companies pour into Vietnam and as Vietnam becomes more developed, there is every reason to believe Vietnam’s legal system and wage rates will develop as well, just as it has done over time in China. There is also every reason to believe that as the quantity of Vietnam’s manufacturing increases, the quantity of defective and dangerous products leaving Vietnam will increase as well.

What do you think?  Is doing business in Vietnam more difficult in China and, if so, what makes it so?

Manufacturing outsourcing to both Vietnam and to China will continue increasing. Obviously, there will be many companies that choose Vietnam for their manufacturing who would have chosen China a few years ago. There will also be many who are in China now who will choose to expand their manufacturing operations in Vietnam instead of China. But China will remain the overwhelming choice for manufacturing and few companies manufacturing in China now will up and leave for Vietnam. Vietnam is not a panacea and it is not a replacement for China. Not even close.

What do you think?

  • Pffefer

    How about India? I think I read a French consulting firm recently saying that in five years India will be up there with China, if not replacing China as the global manufacturing powerhouse?

  • http://www.thechinagame.com Paul M

    Vietnam’s profile was raised recently with its ascension to the World Trade Organization, agree that China is not going to be displaced anytime soon.
    Oddly enough, there is/was another fellow named Dan Harris who works as US Deputy Assistant Commerce Secretary in Vietnam.

  • http://www.chinavortex.com Paul Denlinger

    I have heard of some friends visiting Vietnam; it is a country of great natural beauty and definitely has cultural color with some nice restaurants coming up in Hanoi and Ho Chi Minh City. A few have opened high-end restaurants and cafes serving Vietnamese and western expats.
    For hi-tech investors, Vietnam offers a good place to diversify from China; this is what Intel is doing by putting some manufacturing facilities in for. Computing and hi-tech is here to stay, and in China and other places, the shortage of good managerial and technical talent is acute.
    From the tourism and hi-tech point of view, Vietnam makes sense. It makes a good angle for Vietnam to get started on the path to development.

  • http://www.maskofchina.com dezza

    i think it’s a good time to invest in ports operators like HK’s Hutchinson Whampoa. If they don’t already know Vietnam’s got inadequate ports, they’re going to be moving in real soon.

  • http://layered.typepad.com layered

    I agree with your assessment for now. As I see it, Vietnam is about where China was in the mid-90s. When I visited Shanghai in 1994, there were no freeways, no mass transit system, and one antiquated small airport. Within a decade that had all changed. The same describes Ho Chi Minh City today. Vietnam is on its way to repeat China’s success in building infrastructure, and at about the same speed. Even then, Vietnam will only be an important competitor among several in Asia. I don’t believe in the idea that rising as an important competitor means another country has to decline. Both will prosper.
    – Mel in HCMC, Vietnam

  • http://www.jennifernoveck.com Jenn

    I agree, the infrastructure is just not there yet. So even if you could move to Vietnam and do business for cheaper, I think businesses would end up wasting a lot of time on issues like transportation and basic set up.

  • http://badbadchina.blogspot.com nanheyangrouchuan

    China would have the infrastructure it now has if it were not for the massive FDI, hardware and expertise it received from the EU, Japan and the US. So Vietnam is going to be derided and ignored because it does not have a China equivalent of infrastructure? Perhaps if the corporate world had not poured so much energy, money and effort into China there would be a more well-rounded field to disperse outsourcing to. Now, many companies are beholden/nearly trapped in China because they put all of their eggs in one basket.
    And as far as who would get to do infrastructure development, China is applying alot of pressure on ASEAN nations to let China do the sole investment, development and build out of their infrastructure, with most or all of the labor to be done by Chinese labor/colonists.

  • http://www.researchcmr.com S. Rein

    While the infrastructure might not be in place now, Vietnam understands that it needs to improve its logistics and is supporting heavy investment into the sector. To lessen political risk, MNCs are looking to diversify both low and hi-tech production facilities out of China — Vietnam is becoming a top place for capital.
    We have interviewed senior executives of MNCs and the majority said their Vietnam exposure is going to increase significantly within the next 3 years. While Vietnam might be starting at a low base point, the numbers will go up and the infrastructure will catch up just as it did in China where even a decade ago the logistics was not great compared to now. Unlike in India, the Vietnamese Government is strong enough to barrel through the reforms needed.
    My firm, CMR, is looking to open up an office in Vietnam to cater to demands from our clients. While we won’t go in as fast as Dezan, we are looking to open an office there sometime in 2009 or 2010. For market research, we need to move in a bit slower as the demands are not quite there yet. But we expect Vietnam to be a major growth engine for our firm in a couple of years.

  • http://www.allroadsleadtochina.com allroads

    Dan – Thanks for the link and generation the discussion
    Dezza – hutch I am sure is well aware, and that is why I am all the more skeptical. the Vietnam government recently put together a budget of a few hundred million USD to be spent on ports (great step) to be spent over the next ten year (arg…).
    Chris – The overland link to China is going to be critical for the development of the Northern part of China (I think that HCM ability to link to S’pore and BKK will be their vital lanes).
    Good luck with the new office. Unlike Shaun and yourself, I am going to pass… China is enough for me.
    Nanhe – chicken and egg. I don’t think anyone on this board makes the rules. Just pointing out the realities on the ground.
    Overall, I think that Vietnam does hold niche opportunities. However, a lot of those opportunities will come as a result of US/ EU protectionism from Chinese goods (i.e. quotas). Also, unlike my optimistic friends, I see the majority of these opportunities going to Chinese firms who are looking to outsource. the climate in Vietnam is very similar to China of old, and with a Chinese minority already in place, the environment is very comfortable for Chinese. There will be large investments (2nd, 3rd, and 4th generation), but I suspect that those investments with roots in North Vietnam will leverage the road network Chris mentioned to access the Chinese market.

  • http://www.chinalawblog.com China Law Blog

    Pfeffer,
    I thought about including India in this piece, but chose not to because I know so little about India. I have actually done a fair amount of Vietnam work (and I love the place) and one of our clients in Seattle essentially heads up the local Vietnamese business community. I really hear mixed things about India. Some say it’s a great place for manufacturing, others say it is one of the worst places on earth and that it’s logistics are not just bad, they are virtually non-existent. My sense is that it really depends on the product. Others?

  • http://www.chinalawblog.com China Law Blog

    Paul M,
    Vietnam is rising. No doubt about that, but I wonder how much of it will be factory to the world, rather than tech and agriculture.
    That is funny about “the other” Dan Harris, particularly since the new head of the Commerce Department in Vietnam is a very close and old friend of Steve Dickinson.

  • http://www.chinalawblog.com China Law Blog

    Paul D.,
    I am a huge fan of Vietnam and its growth opportunities and I love the place. I am right now in the process of planning a family vacation in Vietnam this spring. All that you say is true, but I still do not seeing it moving in much on the factory of the world.

  • http://www.chinalawblog.com China Law Blog

    Dezza,
    They know. But I think it takes more than just a good port. Access to the port is also critical.

  • http://www.chinalawblog.com China Law Blog

    Layered/Mel,
    I agree with you completely. So much so, I wish I had said what you said. Not only is it not a zero sum game, it is a game in which a rising tide can lift all boats and wealth can trickle, to borrow a few cliches.

  • http://www.chinalawblog.com China Law Blog

    Chris D-E,
    You are absolutely right about the low end manufacturers, or what I call the rubber duckie factories. The reality is that China is looking for reasons to get rid of those companies and the deck is starting to get stacked against them. There are also those companies in China (and you and Steve and I have discussed those) that have really managed to survive only by skirting Chinese law and the days of those companies are numbered as well.
    You are right to point out the developing trade relations between Vietnam and China and Vietnam’s developing infrastructure. But, for most manufacturers, it is not going to be a replacement for China, particularly in the short term.
    Congratulations on your Vietnam office. That makes complete sense. Just about every China service company I know (my firm included) seems to be looking at Vietnam with an eye towards figuring out when to go in.

  • http://www.chinalawblog.com China Law Blog

    Jenn,
    I concur.

  • http://www.chinalawblog.com China Law Blog

    nh,
    Nobody is “deriding” Vietnam. Far from it. I, along with just about everyone else who has commented, has noted Vietnam’s tremendous potential. I actually think Vietnam will be better off not taking in all of the factories that are threatening to leave China.

  • http://www.chinalawblog.com China Law Blog

    S. Rein,
    I feel like we are having online the same conversation we had a few weeks ago at Simply Thai in Shanghai. I completely agree with you and, as you know, we too will always have our eyes on Vietnam.

  • http://www.chinalawblog.com China Law Blog

    Chris D-E,
    I will have you know that I was fluent in French at ten years old. I was a 4th grader at one of the elementary schools in Aix-en-Provence and my French was so good that towards the end of the day (after hearing my French all day), a substitute teacher hit my wrist with a ruler for not being able to answer a question about French presidents. It was not until a fellow student told the sub that I was an American that she even know and then, she actually apologized.
    I love Quebec, but I figure the East Coasters have that covered. We do need to start pitching our services to business in British Columbia now that the US dollar has weakened so much against the Canadian dollar. I used to love using Canadians to arbitrate international disputes because they were good and they were cheap. Now they are just good and it is we American lawyers who are cheap.

  • http://www.chinalawblog.com China Law blog

    Allroads,
    I agree with all that you say, except I disagree with your pessimism regarding non-Chinese companies making their way in Vietnam. I have had countless Vietnamese (both those in Vietnam and those of Vietnamese ancestory here in the US) go out of their way to make clear they really really really want US investment, expressly as a counterweight to Chinese. The doors in Vietnam are opening and American companies would be making a big mistake not to at least look inside. Heavy manufacturing …. not yet for most. But other opportunities …. oh yea.

  • Jonathan

    India will be there indeed in just a few years, as far as logistics and manufacturing goes. The government is definitely starting to put their efforts into this, service cannot offer jobs for all the masses. Add to that, that India is far ahead of China with service, innovation and language capabilities [English].
    Even SEA countries are investing there now, as it’s cheaper than China in some cases, and lowers the risk.
    As in India, Vietnam is still lacking the infrastructure, but this is only an issue of a decision. There are plenty of mega corps that can setup their own logistics to some extent if it’s worth it. Hong Kongers are already massively investing in Vietnam instead of Canton – it’s close and convenient. Check the map.
    My Question: does the world actually need two giant manufacturing countries at this point in time?
    So Vietnam is not in competition with China, and will never be really, they all will grow together with other SE Asia countries. But, India definitely is. One thing about India though, it has seen quite a rise in terrorist events and is home to a very large minority that is a fertile ground for instability in the country.

  • http://badbadchina.blogspot.com nanheyangrouchuan

    @Allroads,
    Despite similar cultures, the Vietnamese and Chinese hardly get along and Chinese businesses may find themselves being the ones descriminated against while the western, Japanese and Korean companies benefit. The head of the NVA was quoted after the Vietnam war as saying “I’d rather eat French *&^% for 1000 years than eat Chinese stuff for 10 years.”. Vietnam won its independence from China and was subsequently invaded 13 times between then and 1979. And China has menaced Vietnam with seizing its fishing vessels and closing the border if Vietnam allows Indian, the US, Japan or anyone else to lease and develop the Cahm Rhan Bay (spelling?) harbor.
    There is also an a huge population of American professionals of Vietnamese descent who will make out big blazing the way.

  • http://www.allroadsleadtochina.com allroads

    Hey Dan,
    I am by no means an expert in Vietnamese business, so my bias may be unfounded. however in the trips I have made (4 since 1995) I will say that there has been tremendous change (thanks largely to tourism). The
    I have visited 30+ factories (nearly all Textiles), and spent a day on the back of motorbikes watching Bayer distributors move their products… probably the most exciting part of my last trip.
    However, much like China when I first got here, there are a lot of people priming the pump who have little knowledge of what the realities are (I myself may be included in that), and while there are certainly real opportunities, there are hurdles that will make even the Old China hands shutter.
    Vietnam, Thailand, and even Laos will all have important roles in regional development, and I believe that a lot of their futures lie with China. Many economies were pulled out of 97 because China needed raw materials, and now as China is outsourcing more and more to these nations (to the Chinese minorities in these countries), it is Chinese money that will develop many of the key sectors.
    Foreign firms will have opportunities, but like China in the 80s.. it is at your own risk.

  • http://www.chinalawblog.com China Law Blog

    Jonathan,
    No matter what India does for its manufacturing, it will be around ten years behind China for the bulk of it. It may eventually catch up, but it is going to take it quite a while.

  • http://www.chinalawblog.com China Law Blog

    nh,
    I agree with you. I actually agree with you.

  • http://www.chinalawblog.com China Law Blog

    AllRoads,
    With risk there is opportunity….
    From a legal perspective, I would say Vietnam is maybe 10-15 years behind China, but my sense is that it knows it.

  • http://www.allroadsleadtochina.com allroads

    @ nh
    I was speaking from business culture more so than from the overall culture. however, you bring up an interesting point, and I think that adds more risk.
    I remember post 97 when it was Chinese minorities who were taking the brunt of the anger from local populations. I still have friends who will not return to Indonesia.
    Returning Vietnamese. I have read some articles, and there are a few who seem to be profiled on a frequent basis. Does that mean that only a few have returned, or only a few have made it? Either way… sure to be interesting to see how that group performs in relation to the Chinese returnees.

  • Jet So

    From the above commentaries, I perceive that Vietnam could become more of a direct competitor to the ASEAN countries (e.g. Thailand, Philippines & Indonesia & eventually perhaps M’sia) in those niche manufacturing & logistic markets left over between China & India.

  • Pffefer

    nh, nobody, including the Japanaese, the Americans and the Vietnamese, likes the Chinese, yet everybody loves profit and that’s why you have come to China and allowed the Chinese to come. The Vietnamese are pragmatic just like everyone else is. If mending the fence with China helps Vietnam, they will do it.
    It’s time for you to leave the “bad China” though.

  • http://badbadchina.blogspot.com nanheyangrouchuan

    The SE Asian economies will try to diversify as much as possible to limit their dependency on a China that has long seen them as vassal states. Their ability to develop is already limited by China’s dams on the Mekong River.

  • greg

    Jonathan,
    I’ve read and heard a lot about India’s supposed advantages over China: service, innovation, language, democracy or just about everything EXCEPT infrastructure. I understand the (wishful) thinking behind the reporters and pundits who propagate this view. These tend to be the people who don’t have firsthand experiences and don’t know what exactly goes on out there …
    India’s IT service is definitely way ahead of China’s, no question about it and English is a big part of why. But India is better than China in innovation? Come on! In terms of R&D, technologies, China is far ahead of India. And, China’s advantages in manufacturing is not just attributable to infrastructure. Think about supply chain, think about skilled labor, where better primary & middle level education are the key. Also think about economy of scale – many Chinese companies gain substantial cost advantage because of the large domestic market.
    Finally, is India’s democracy an advantage over China at this stage of the development? I understand it’s hard for anyone who grew up in a democratic country to admit it might actually be a disadvantage …
    After all, all these India “advantages” exist long time ago.

  • http://badbadchina.blogspot.com nanheyangrouchuan

    “In terms of R&D, technologies, China is far ahead of India.”
    Is that counting organic R&D or JV and WOFE R&D?
    There is no, none, zero Chinese companies that are global and not at least partially government owned. None of India’s global players would qualify as an SOE or an arm of one.

  • Tony

    Greg,
    One can make the argument that India is pursuing the future (software, chip design, embedded software, services, etc) while China is pursing the past (manufacturing).
    And in those areas, Indian talent (including those employed by multinationals) is way beyond anything in China – for example, companies like Intel and TI have been designing chips in India for a long time. IIRC, Huawei has a software development facility in India.
    A look at Indian electronics based on the recent Embedded System Conference there is here: http://www.eetimes.com/news/semi/showArticle.jhtml?articleID=202201518

  • greg

    Just one example.
    HuaWei Technologies’ revenue ($15 billion) is close to the total of India’s top five IT service companies, which are considered India’s most global companies. More than half of HuaWei’s sales are from outside China.
    HuaWei is a private company; but it doesn’t matter it’s SOE or not – My point is not about ownership. ZTE is another good example.
    There are many industries where China leads India. These don’t have to be in hi-tech or they’re necessarily the most advanced in the world. China just has a more comprehensive industrial infrastructure. Think about electronic industry, oil/chemical industry, aerospace, mechanical, semiconductor, shipbuilding, etc. No, China does not lead the world in these industries, but they’re ahead of India. That’s the point.
    “‘In terms of R&D, technologies, China is far ahead of India.’
    Is that counting organic R&D or JV and WOFE R&D?
    There is no, none, zero Chinese companies that are global and not at least partially government owned. None of India’s global players would qualify as an SOE or an arm of one.”

  • http://badbadchina.blogspot.com nanheyangrouchuan

    “HuaWei is a private company; but it doesn’t matter it’s SOE or not – My point is not about ownership. ZTE is another good example.”
    Private except for Beijing owning 10% to 20% or more. Shares of these companies are given to Beijing to guarantee loans and licenses.

  • Inst

    On a thread discussing Japan’s China 1 strategy on China Defense Forum, the knowledgeable but nationalistic Strangelove mentioned one point, something I haven’t seen on this board yet.
    Chinese businesses benefit from clustering of manufacture. All the stages of manufacture are in the same town, and the only thing external is the resources. As a result, the factory owners know each other, and responsiveness is much heightened. Say, a Guangzhou printer needs to print a few tens of thousands of copies of “The ‘Thoughts’ of Jiang Zemin”. He doesn’t have enough paper or ink to produce them all. So, he calls up one of his buddies across town, and within twelve hours, all the necessary equipment is assembled at his factory. At least in the preliminary stages, Vietnam can’t counter this reflexivity.
    Further, Vietnam used to be one of Amy Chua’s countries, where there is a politically-dominant majority and an economically-dominant minority. Guess who’s the latter category? Chinese. Southern Vietnam was supposed to be more prosperous than Northern Vietnam in part because of ethnic Chinese running their economy. Hence, it is possible that the native Vietnamese may lack the skills to run their economy, and to acquire these skills would take time.
    Next, my mother was kind enough to let me eat dinner with her suppliers. One of them had recently made a visit to Vietnam. I asked him about Vietnamese enmity against Chinese, but he had a blank look to his face. I found him a happy person, possibly insensate, and alternately he might have just been humoring my mother. Empirically, what is your opinion of Vietnamese-Chinese relations? I know 79 was supposed to be particularly bad, with the PLA, depending on whose story you listen to, butchering Vietnamese or destroying northern Vietnamese infrastructure.
    Lastly, China is trying to encourage investment into its second-tier and inland cities. A family friend invested in an inland factory, but somehow it didn’t work out. What is preventing Western and Chinese businesses from developing inland? Is it the inappropriate infrastructure, such as the ridiculous low-bridges on China’s rivers (thanks CLB, that was definitely not in Western newspapers)? Or are labor prices still sky-high?

  • greg

    Tony,
    I think we’re touching on two somewhat different, but related subjects here. One is that if Vietnam or India can quickly replace China in manufacturing. The other is, as your post seems to imply, if India’s development strategy focusing on software and service can catch up or even surpass China in economic development, which follows a more traditional manufacturing-first development strategy.
    My arguments about the first point are that China’s advantages in manufacturing are much more than infrastructure. And it is very difficult for Vietnam or even India to replicate and catch up with China in the near future.
    The second point is also very interesting. China’s development model is the more conventional one, which follows other more developed East Asian economies such as Japan, Taiwan and South Korea (and UK and US much earlier), albeit at a much larger scale. There is, however, no precedent in history for a poor, developing and agricultural economy such as India’s to leapfrog to a developed, service-based economy. India’s IT and business process service sector employs about 2 million people, most of them highly-educated white-collar workers. China’s export-oriented manufacturing sector employs at least 10 times as many workers, most of them blue-collar workers and from country-side. For a developing country with 1+ billion population, majority of them peasants, which growth model is better? It’s obvious. Moreover, manufacturing industries tend to create clusters of related industries and suppliers, and have historically been the breeding beds and sources for much of the R&D and innovations. India’s booming outsourcing service economy, on the other hand, tend to be more isolated from the domestic industries and markets.
    By the way, my argument is not a dig to India or Indians. I’m very impressed with India’s IT service companies and their talented employees based on extensive firsthand experience. I would also argue that it’s very difficult for China to catch up with India in the ITS & BPO industries in the foreseeable future, despite Chinese government’s ambition, simply because India’s head-start and its intrinsic advantages in the area. But that doesn’t mean China should give up and not develop its IT service industry. The goal, however, is to generate large number of white-collar jobs since China suffers from a surplus of college graduates, as a high-ranking Chinese government official told me. Actually, China has a larger IT software and service industry than India if you count the domestic market.
    The following article from an India professor provides excellent arguments on why India can not leapfrog the manufacturing stage and why China’s development strategy is superior:
    http://www.mccombs.utexas.edu/news/pressreleases/konana_india_op-ed.asp
    For a fascinating report about China’s export-oriented manufacturing industry, see the report by James Fallows at The Atlantic: http://www.theatlantic.com/doc/200707/shenzhen

  • nguyenb

    I’m a native Vietnamese living in Vietnam. Dont think Vietnamese will ever replace China as world factory. First, much smaller population. Second, the quality of general ppl. Although both Vietnamese and Indians may have few talents, but the quality of the whole ppl can never match that of Chinese. Vietnam is now somewhat poorer in term of per capita income than India, but Vietnamese never look to compare to India or Indian. Third, the hardworking spirit and discipline of the Chinese are like or better than any North East Asian nations. The fourth, IQ. I don’t believe very much in that stuff, but it still should be counted. Chinese have much higher IQ than Indian and Vietnamese.
    In addition, ethnic Chinese is now almost the same as average Vietnamese in term of income. The leaders and enterpreners businessmen in the South of Vietnam are mostly Northern Vietnamese, only some Chinese. In term of education achievement, ethnic Chinese are left far behind ethnic Viet. In general, Northern Vietnamese not really look down, but feel uneasy on both Southerners and ethnic Chinese.

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  • Sammy Nguyen

    Hi everyone, I’m Vietnamese.
    Stumbling upon this article while searching for “can Vietnam economy do better than China economy”, surprised to know there is bunch of people who understand so much about VN as well as it strengths and weaknesses. Appreciate!
    I’ve been to Shanghai and Shezhen, 2 big stars of China economy landscape. In mid 1995 these cities are no better than HCMC in 2005. However, they are head-spinningly changing. And so is HCMC now. I constantly overseas and everytime I come back, I see the changes taking place clearly visibly.
    The new city center on Thu Thiem peninsula to learn from Shanghai to be fully finished by 2020. 6 lines subway and 3 lines skytrain to be finished by 2020. Various infrastructure projects are scanned and inaugurated. Busineses are encouraged to move to adjacent provinces to let place for IT and high-performance industries in HCMC. This makes HCMC and adjacent provinces to be great HCMC metroplitan with 10m ppl in 2020, same as Shanghai now. Apparently, 2020 is the point when VN is determined to be a fully industrialized country, as stated.
    The government is definitely committed to improve infrastrucure currently.
    VN will never become world powerhouse. In a recent speech by PM, its already clear that VN will never compete to be a powerhouse. However it also regconize that leapfrog is almost impossible. it learn from China and India lessons. it set, at the same time, manufacturing and higher-performance industries will be walking together. There is one thing that none of you here seems to know that the government not seeing China as something to get over now but Thailand is the one, which makes sense.

  • Sammy Nguyen

    @nguyenb:
    “Second, the quality of general ppl. Although both Vietnamese and Indians may have few talents, but the quality of the whole ppl can never match that of Chinese. Vietnam is now somewhat poorer in term of per capita income than India, but Vietnamese never look to compare to India or Indian. Third, the hardworking spirit and discipline of the Chinese are like or better than any North East Asian nations. The fourth, IQ. I don’t believe very much in that stuff, but it still should be counted. Chinese have much higher IQ than Indian and Vietnamese.”
    Yup i agree that YOUR, not Vietnamese ppl, quality, spirit and IQ are “strikingly” LOW.
    Let me teach you a lesson: Don’t ever EVER say and even have a thought of your ppl are inferior because it only states one thing that YOU are “brilliantly” LOW.
    I suppose you are not a business person and moreover, a kid, i really mean it.

  • Sammy Nguyen

    @nh:
    “Further, Vietnam used to be one of Amy Chua’s countries, where there is a politically-dominant majority and an economically-dominant minority. Guess who’s the latter category? Chinese. Southern Vietnam was supposed to be more prosperous than Northern Vietnam in part because of ethnic Chinese running their economy. Hence, it is possible that the native Vietnamese may lack the skills to run their economy, and to acquire these skills would take time.”
    Well, i understand this when you look at economy situations of some, if not all other SEA countries, e.g M’sia, S’pore, T’land, Phi’pines…
    However, in a strong stand of a businessman in HCMC, I turn this down. The drive of Vietnamese economy is led by Vietnamese, more specifically, Northern Vietnamese. The HCMC economic thriving is also led by Northern VNese, not Chinese. The biggest private enterprises of the country are mostly northern and some southern with few Chinese. But i shall not hereby divide VNese into northern or whatever.
    Southern VN is more prosperous because here is like Shanghai with a lot more advantages over other parts of the country. Port, population, legal system, government attention, better planning, infrastracture (altho stil bad), high intact with VNese overseas who provide capital and entrepreneurship… to name some of the advantages.
    Another thing to notice which is true: Vietnam has a history of fighting off invaders including China. Therefore, it and its ppl believe they are in no way inferior to any ppl in the world in any fields. Its only the time will prove. I’m not saying it with a hype-nationalism but a fact observation. VN will never let Chinese minority to take over in any areas, unlike other SEA countries.
    “Next, my mother was kind enough to let me eat dinner with her suppliers. One of them had recently made a visit to Vietnam. I asked him about Vietnamese enmity against Chinese, but he had a blank look to his face. I found him a happy person, possibly insensate, and alternately he might have just been humoring my mother. Empirically, what is your opinion of Vietnamese-Chinese relations? I know 79 was supposed to be particularly bad, with the PLA, depending on whose story you listen to, butchering Vietnamese or destroying northern Vietnamese infrastructure.”
    i surprised to know that there is still Chinese concerning about this matter as most of my Chinese friends and partners never heard and care about this. Appreciate your VN-CN history and relationship. But I address to you that there is no emnity. A reason is a high intermarriage ratio between Chinese minority and Viet majority. According to 2000 research, the intermarriage ratio between the two is ~35% of Chinese minority have a Viet spouse. Consequently it leads to high integration degree of Chinese minority to Viet majority. I have so many 100-50-25-

  • Teo

    The Vietnamese are a very complex group of people. There are the “original” Vietnamese who reside in the Northern part right below the Chinese border (we call them the “Kinh” people). These people have lighter skin and are heavily mixed with the Chinese. Many of these Chinese or half-Chinese-half-Vietnamese speak Chinese at home but they almost never identify themselves as Chinese in public to avoid discrimination, just like most Chinese living in other parts of the country. Regardless, they always have Vietnamese names to blend in with the general population. Historically, Chinese living in Vietnam have faced much discrimination and generally do not speak of Vietnam in positive manner. When asked in public, they always say they are Vietnamese, but among friends and family, they consider themselves Chinese. Yes this is a generalization but it is a personal experience of mine. The non-Chinese Vietnamese in this region are very patriotic and proud, however. Ho Chi Minh is one of them.
    Everything below this area used to be a kingdom of Champa and it was later annexed by the Kinh people. These people have darker skin and look very much like Cambodians and Laos. When the Kinh took over, many of of them fled their homes and migrated to Laos or Cambodia. Many of them stayed and also faced discrimination. Many of them still harbor ill-will towards the Kinh to this day, including those whose ancestors had fled to Laos and Cambodia.
    Then there is another big group of light skin Vietnamese who reside in the middle of the country and are believed to have migrated from the Northern part when the Kings moved there (Hue). This group is also very very patriotic and proud. And then there are hundreds of groups of mountainous ethnic people were also discriminated against.
    As you can see, it is in no way a unified group of people and the level of education, and poverty, and patriotism of each is different. This is one of the things that the CIA failed to realize when they did they very first covert OPs in the South after the French-Vietnam war. After coming in contact with the less patriotic and easily manipulated remnants of the Champa and various mountainous groups in the South, they thought Vietnam would be an easy battle to win without realizing that there were a lot more proud Vietnamese who would be willing to fight and die for their country.
    But enough of history. I wish for Vietnam prosperity and the world recognition its people deserve.