The Trend of Shifting Production Out of China
In the context of globalization and trade policy fluctuations, the trend of shifting production out of China has become more pronounced. The “China + 1” strategy has driven many large corporations to seek new locations for expanding their manufacturing operations. Developing countries such as Vietnam, India, and Indonesia have become attractive destinations due to their low labor costs, favorable investment environments, and free trade agreements (FTAs). Yan Liu, an economist at the World Bank (WB), has pointed out that this trend is driving the redistribution of investments away from China, with Vietnam being one of the main destinations.
Advantages of Vietnam
Labor Force: Vietnam has a young, abundant, and competitively priced labor force. With an improving education system, Vietnamese workers are increasingly skilled and well-qualified, meeting the demands of modern industries. In recent years, major corporations such as Samsung, Intel, and Foxconn have heavily invested in Vietnam, demonstrating confidence in the quality and potential of the local workforce.
Geography: Vietnam’s strategic geographical location near key maritime routes facilitates easy connections with major markets like China, Japan, and South Korea. This provides favorable conditions for transporting goods and raw materials, helping businesses reduce logistics costs and delivery times.
Infrastructure: Vietnam is investing heavily in infrastructure, including seaports, airports, roads, and railways. Modern industrial parks and export processing zones built to international standards offer reassurance to investors choosing Vietnam as a manufacturing hub. The investments by Samsung in Thai Nguyen and Bac Ninh, as well as Intel in Ho Chi Minh City, are clear evidence of Vietnam’s attractive infrastructure.
What Investors Need to Do to Seize This Opportunity
To leverage Vietnam’s advantages and the trend of production shifts, investors need to focus on the following key aspects:
Invest in Machinery and Facilities: Upgrading and investing in modern machinery and automating production processes will help increase productivity, reduce costs, and improve product quality. Investors should build high-standard factories and warehouses, ensuring safe and efficient working conditions. For example, Samsung has increased its investment by an additional $920 million to expand the Samsung Electro-Mechanics Vietnam project in Thai Nguyen, bringing the total project investment to nearly $2.3 billion.
Train High-Quality Workforce: The success of investments heavily depends on the quality of the workforce. Investors need to focus on training and enhancing the skills of their employees. Collaborating with universities and vocational training centers to develop appropriate training programs is crucial. Intel has invested an additional $475 million in Intel Products Vietnam (IPV) to boost production and train a high-quality workforce to meet the growing technological demands.
Develop Modern Logistics Solutions: To ensure smooth supply chain operations, investors need to develop modern logistics solutions, from transportation and warehousing to inventory management. Applying technology in logistics management will help minimize risks, optimize costs, and enhance business efficiency.
PNC’s Capabilities
PNC is a pioneer in embracing new technology trends. We pride ourselves on having a young, professional team with extensive experience in collaborating with partners from Europe, China, and Japan.
Embracing New Technology Trends: PNC continually updates and applies the latest technologies in manufacturing and logistics management. We offer automation solutions, utilizing robots and artificial intelligence to optimize production processes.
Professional Workforce: PNC’s team is well-trained and supported by a group of professional European experts, skilled and experienced in implementing large projects. We are committed to delivering high-quality services that meet the most stringent requirements of our clients.
International Cooperation Experience: PNC has extensive experience working with many international partners, giving us a deep understanding of the needs and standards of global businesses. We are confident in our ability to assist investors in efficiently establishing and operating manufacturing projects in Vietnam.
With the trend of shifting production out of China, Vietnam is emerging as a new global manufacturing hub. To seize this opportunity, investors need to focus on investing in machinery, training the workforce, and developing logistics. PNC, with its superior capabilities and international cooperation experience, is ready to accompany businesses on their journey to development and success in the Vietnamese market.
Contact with us now via:
Hotline: (+84) 919 247 843
Email: diep.ns@pnctech.vn
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