Will Vietnam or Indonesia have a chance to win in welcoming factories from China to Southeast Asia?

Looking at the numbers, it can be seen that Vietnam has an advantage over Indonesia in terms of readiness for automation, labor costs, more attractive corporate income tax, logistics capacity is also more appreciated and also has more free trade agreements. especially the recent EVFTA. 

However, the port infrastructure is still lagging behind Indonesia. At this point, Indonesia has an advantage over Vietnam with a wide sea route.

Not only that, Indonesian Ambassador to Vietnam, Mr. Ibnu Hadi revealed: "The process of licensing investment for foreigners in Vietnam is really easy. Therefore, investment can be carried out more quickly and conveniently. If a foreign investor enters Vietnam, only 2 licenses, investment approval and business registration are required," he told CNBC Indonesia. "It is important for us to accelerate trade cooperation, for example, through the Free Trade Agreement (FTA) and expanding the market so as not to fall behind."

Of the 56 companies that moved production out of China between April 2018 and August 2019, 26 moved to Vietnam, 11 to Taiwan and 8 to Thailand and only 2 to Indonesia.

According to CNBC, although Indonesia's GDP growth rate is also relatively high compared to other major economies globally, economists generally agree that the country is underperforming its potential to attract FDI. known as the "sleeping giant".

According to Young Intellectuals