SCMP: The US-China trade war is a "gift" for Vietnam

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SCMP said foreign investors are continuously flocking to Vietnam as the trade war between the United States and China becomes increasingly tense.

US President Donald Trump has officially imposed a 25% tariff on $200 billion of Chinese exports, effective May 10, and is considering imposing a 25% tariff on the remaining more than $300 billion if the two sides do not reach an agreement.

Analysts said that tariff barriers will quickly fill the flow of production investment capital into Vietnam.

Many factories in China have considered moving production lines to Southeast Asia after the new tariffs were imposed, and Vietnam became a potential destination.

Investment in Vietnam, especially in light, labor-intensive industries, has been booming since last year.

According to Vietnamese government data in April, new investments registered in the country increased by 81% and capital inflows from foreign investors increased by 215%. mainly in the field of manufacturing and manufacturing.

In April 2019, exports to the United States also increased by 28.8% year-on-year.

This trend is expected to increase further in the third and fourth quarters of this year as start-up factories begin to operate, according to Maxfield Brown, senior associate at Dezan Shira & Associates in Ho Chi Minh City.

However, Brown warned that Vietnam's infrastructure network, labor market and local supplies are all being pushed to the limit as investment continues to rise, especially in places around Ho Chi Minh City and Hanoi.

Mr. Le Anh Tuan, head of Dragon Capital's research department in Hanoi, said that while investment will continue to shift from China to Vietnam, the capacity in Vietnam with the population size of Vietnam (less than 100 million, equivalent to China's Guangdong province) is only limited to be able to absorb receive this flow.

Mr. Tuan said: "There is no doubt that China has been and will continue to be the world's largest manufacturing factory. But I still think that the movement from China to different countries, especially Vietnam, is increasing."

SCMP predicts that Vietnam and Malaysia will be the biggest "winners" in the field of technology equipment manufacturing. Meanwhile, for garment exports, Bangladesh, India and Vietnam will benefit greatly.

Vietnam's economy grew at 7 percent in 2018, the fastest figure in more than a decade, thanks in large part to $19 billion in foreign direct investment.

Bao Minh (according to SCMP)

Source: trithucvn.net

SCMP: The US-China trade war is a "gift" for Vietnam

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