Vietnam has seen a surge in foreign investments as more companies seeking to avoid US tariffs on goods from China relocate there.
IBE Electronics’ factory in Vietnam’s northern Bac Ninh province counts US electric vehicle giant Tesla among its customers.
Ms Angel Xu and her husband founded the company in China’s manufacturing capital Shenzhen two decades ago, with the initial aim of serving the local market.
As China gained a reputation for being the factory of the world, the firm took on several American clients.
But when import tariffs were slapped on Chinese goods in 2018 amid a trade war between China and the United States, these clients asked for their manufacturing to be shifted elsewhere.
“In 2019, we thought about which country is better. Then we chose Vietnam because Vietnam is close to China,” said Ms Xu.
She said it took the firm six months to relocate to Vietnam from China. She noted that US customers would otherwise have had to cough up 25 per cent in tariffs.
VIETNAM’S GAIN
Vietnam is among a few Southeast Asian countries that have benefited from the ongoing trade tensions between the world’s largest economies.
The country has seen a surge in foreign investments as more companies like Ms Xu’s seek to avoid US tariffs on goods from China, which have continued to increase.
According to Vietnam’s official data, Chinese investors poured in nearly US$4.5 billion worth of investment into Vietnam – a 78 per cent increase compared with the year before.
Vietnam has also seen a major increase in exports to the US. Vietnam’s exports in computer and electronics parts to the US market reached more than US$13 billion in the first seven months this year, a year-on-year increase of more than 50 percent.
Source: Channel News Asia
