Positioning Vietnam in the global production shift

According to foreign business associations, multinational corporations will continue to shift production to Vietnam.

Of the total 176 cases of production relocation to ASEAN, 90 cases were moved to Vietnam.

Tariffs arising from trade disputes between major economies are once again a concern for businesses. For example, for businesses from Japan, this is considered one of the main reasons that businesses from this country gave in the latest survey about their production relocation trends.

In there, Vietnam is considered the number one choice in the ASEAN region. Of the total 176 cases of production relocation to ASEAN, 90 cases were moved to Vietnam. Similarly, of the 289 projects moving from Japan to ASEAN, 1/3 of them also chose Vietnam. This shows that Vietnam is becoming an important link and the role of Vietnam's positioning in shifting the "flow" of the global supply chain.

At the Japanese brand’s fashion retail store, out of every 10 shirts sold there, 6 were made in Vietnam. It can be said that Vietnam is gradually becoming an important base in the brand’s production chain when it has more favorable factors than other markets in the ASEAN region.

Mr. Nishida Hideki - General Director of UNIQLO Vietnam said: “Expanding the supply chain and distribution network in Vietnam is very meaningful to us. Firstly, the time to bring products from the factory to customers is very fast, secondly, the customer feedback channel for us is also updated quickly to improve products. Third, the supply of goods in Vietnam is always stable and fourthly, the environmental impact is also minimized when the production and distribution channels are close together”.

Định vị Việt Nam trong dịch chuyển sản xuất toàn cầu - Ảnh 1. — Vietnam's commitment to become a carbon-neutral country by 2050 becomes a differentiator to attract investment in the Asian context

By industry, industries such as metals, electrical and electronic equipment components, or textile products... are all in the leading group of the shifting trend. However, according to a representative of the Japan External Trade Organization (JETRO), Vietnam needs to solve the bottleneck in domestic supply capacity when for many years the supply rate of raw materials and electronic components from enterprises has not improved much.

Mr. Matsumoto Nobuyuki - Chief Representative, Japan External Trade Organization, Ho Chi Minh City Office (JETRO) commented: “To take advantage of the opportunities from the trend of shifting investment and production, Vietnam can continue to improve the investment environment through simplifying administrative procedures and perfecting the legal system. I think, at the same time, it will be necessary to strongly develop the supporting industry, improve production technology to increase the ability to participate in the supply chain of foreign investors, including Japan”.

Mr. Bruno Jaspaert - Chairman of the European Business Association in Vietnam commented: "I believe that Vietnam's commitment to becoming a carbon neutral country by 2050 is a differentiator that attracts investment in the Asian context and it also makes Vietnam unique in the eyes of investors. The important thing is that the supply chain, when there are production clusters integrating the supply chain, will differentiate Vietnam from Malaysia, Indonesia or Thailand."

Comments from foreign business associations also suggest that multinational corporations may continue to shift production to Vietnam. This may not be as strong as in 2018, but it is still a continuing trend.

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