Taiwanese and South Korean Companies Accelerate Exodus from China: Vietnam Takes Center Stage in Global Supply Chain
Taiwan and South Korean companies are accelerating their move out of China, seeking a more stable business environment amidst escalating geopolitical tensions and rising operational risks in China. Vietnam has emerged as the new destination for these manufacturers. Vietnamese developer Deep C, operating five industrial parks in Vietnam, revealed that Taiwanese, Chinese, and South Korean enterprises are rapidly shifting their operations away from China or relocating to other countries. In this wave of divestment from China, Vietnam has risen to become a crucial player in the global supply chain.
The Financial Times reported that the impact of geopolitical tensions is prompting a shift in the supply chain away from China. As a result, there is significant demand for land in Deep C’s Two Industrial Zone in northern Vietnam, and the developer is considering ways to create more space. Currently, major suppliers of global tech companies like Apple are concentrated in this industrial park.
Belgium developer Deep C is ready to seize the opportunity brought by the exodus from China. Koen Soenens, Sales Director of Deep C, stated that Taiwanese, South Korean, and Chinese entrepreneurs appear to be accelerating their relocation from China to other countries. When asked about the plans of foreign companies currently operating in China, they responded that they are seeking new locations to serve their overseas clients.
Over the past 30 years, Vietnam’s export-oriented growth has lifted millions out of poverty and gained a significant position in the technology supply chain, including producing millions of AirPods for Apple. According to Vietnamese government data, foreign direct investment in Vietnam reached $22.4 billion in 2022, growing at an annual rate of 13.5%.
Despite a slight dip in foreign direct investment during the first five months of this year compared to the same period last year, investors, analysts, and officials state that foreign interest remains robust. During the first five months, Vietnam attracted 962 new foreign direct investment projects, exceeding last year’s 578 projects during the same period.
Vietnamese Finance Minister Ho Duc Phoc expressed that Vietnam possesses abundant and affordable labor supply, which is expected to remain cost-effective for an extended period. The infrastructure is also improving and becoming more modern.
However, challenges like power shortages and bureaucratic attitudes in the government have negatively impacted Vietnam’s economic development. Koen Soenens of Deep C noted that regardless of concerns about labor, infrastructure, or other issues, few believe that the growth brought by the ‘China+1’ strategy will end anytime soon.
Source: Liberty Times | Link
Our Vietnam News | Link
