Apple’s main suppliers, which produce devices such as Apple Watches, MacBooks, etc., are building large-scale factories in Vietnam and will take in a large workforce.
Symbol of success in opening the economy
At Hanpo Vina Company’s factory in Bac Ninh, Mr. To, the owner of the company, stands among long rows of large machines operating at full capacity to produce plastic processing products according to orders from Samsung and many other electronic companies in the area.
He proudly holds a phone charger, which is expected to be exported to Brazil for everyone to see, and on the back is a laser-printed line representing the current trend of globalization: Fabricado no Vietname.
The words “Made in Vietnam” have become a symbol of Vietnam’s success since the economy opened up in the late 1980s and created momentum for private companies.
Since 2000, Vietnam’s GDP has grown faster than any other Asian country, only after China, at a rate of 6.2% per year, attracting many foreign companies to seek investment opportunities. With the beginnings of clothing manufacturers such as Nike and Adidas, then the strong growth of the electronics industry with a high added value, demanding skilled workers and a commensurate salary.
In 2020, electronic products contributed to 38% of Vietnam’s exports, up from 14% in 2010.
The trade war between the US and China, which started in 2018, has led some foreign companies to shift production as one of the reasons. In 2019, Vietnam produced nearly half of the $31 billion worth of goods imported into the US as companies moved production from China to other Asian countries.
Major Apple suppliers, including Foxconn and Pegatron, which manufacture devices such as Apple Watches and MacBooks, are building large-scale factories in Vietnam and are expected to attract a large workforce. Many other big names are also moving much of their manufacturing from China to Vietnam, including Dell, HP, Google or Microsoft.
All of these will make a positive contribution to Vietnam’s growth and help millions of people improve their lives. The Vietnamese government has set a target for GDP per capita income to soon exceed USD 18,000 by 2045, significantly more than the current figure of USD 2,800, and expects a shift in production from low-value garments to added value to complex technological products will help to achieve this .
The benefits of Vietnam
Vietnam currently has many advantages, including a young and highly skilled workforce. Besides, Vietnam is also a member of many free trade agreements, giving it access to many important global markets. In addition, the Vietnamese government has quickly shifted its anti-Covid-19 policy towards greater flexibility and has fully opened its borders since March.
In addition, the country with almost 100 million inhabitants also has the advantage of 3,000 km of coastline. Thanks to massive investments in infrastructure, Vietnam’s electronics manufacturing hubs are just a 12-hour drive from Shenzhen, China’s tech capital. “You don’t have to shift the supply chain when you invest in Vietnam,” says a representative of a business park management unit.
What the Hanpo Vina factory of Mr. To do shows Vietnam’s success and also the limitations that still exist when it is just one of the few companies supplying products to large multinational corporations.
The company that makes plastic products are among the simplest components in Samsung Galaxy phones. In addition, the production systems are all imported from Korea. These are just low value production stages in the supply chain, which means modest profits.
The government promotes the role
The government is promoting its role. In May, Prime Minister Pham Minh Chinh, along with leaders from many Southeast Asian countries, attended the summit with President Joe Biden in Washington. The prime minister later also visited the headquarters of Apple, Google and Intel in Silicon Valley.
Samsung will open a research center in Hanoi next year and is also considering the possibility of setting up semiconductor factories here.
In addition, Vietnam should also strengthen its teaching capacity at university level or vocational training programmes. Boeing Vietnam director Michael Nguyen said multinational companies can work closely with universities to tailor curricula to the needs of the job.
Foreign investment has had a positive effect, but this will take time. If Vietnam can follow the prosperity of Asian countries like China, Japan and South Korea, major investments will focus not only on infrastructure, but also on people, according to The Economist.
@ cafefu
