- 2024-04-23T00:00:00
- Sector Reports
Vietnam is a leading beneficiary of the structural shift in supply chains away from China due to its competitive advantages such as relatively low labor costs, a young and increasingly well-educated workforce, improving infrastructure and business environment, a broad range of free trade agreements (FTAs), and an ample land bank pipeline to accommodate mega-scale FDI tenants. FDI inflows into ASEAN countries tripled from 2010 to 2022 as investors sought lower-cost alternatives to China. This trend has accelerated in recent years due to the ongoing US-China trade tensions and Covid-19 lockdowns in China in 2021-2022 while the rest of the world re-opened. Growth of Vietnam’s electronics hubs stands out as an FDI success story, leveraging Vietnam’s low-cost advantages and proximity to China. Vietnam’s electronics exports jumped 19.8x from 2010 to 2022, far outstripping the growth of peers such as Singapore (1.5x), Malaysia (2.3x), and the Philippines (3.1x), according to the International Trade Center. Vietnam’s electronics exports ranked seventh globally in 2022, after China and six other developed economies.
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