AirPods, the headphone manufacturer, has confirmed its intention to relocate its headphone production base to Vietnam.

Pegatron and Cheng Uei Precision also said they are considering expanding production overseas for the same fear of barriers in the US-China trade war.

Nguyen Binh Minh, Vice Dean of E-commerce of Hanoi Trade University, said that the relocation of production bases to non-China countries is foreseeable as investors want to avoid the problems in the trade war.

The recent moves show that Trump’s administration wants to set up a technical barrier to hinder the growth of the Chinese economy by restricting imports from China.

Investors want to relocate their factories to the areas with stable political situation, especially to countries which have free trade agreements with the US.

Vietnam can satisfy these requirements. An analyst commented that if Apple’s vendors come to Vietnam, they would bring capital and generate more jobs. They will bring high technologies which Vietnam wants receiving foreign direct investment.

Minh agrees with the view, saying that the trade war, to some extent, would benefit Vietnam. More foreign investors will come to Vietnam, set up factories and make products for export.

However, he warned that Vietnam will feel pressure from the competition. Chinese goods would flood to Vietnam as they cannot enter the US market, thus competing fiercely with Vietnam’s products.

Vietnam can get more jobs and create higher value from the new investment wave, but, with weak technical barriers and loose management, it may allow Chinese products penetrate the domestic market too easily.

In the case of Apple’s vendors, Minh said this would be a golden opportunity for Vietnam’s businesses to build up their prestige and leave a good impression on the world’s manufacturers. 

This will also serve as the prerequisite for Vietnam to lure investment from big manufacturers seeking destinations other than China.

He said that Vietnam needs to prepare a high-quality labor force with workers who can fulfill the phases of modern production lines. A cheap labor force remains one of the biggest advantages of Vietnam.

Vietnam’s supporting industries still cannot develop, even though the country has been trying to develop the industries for 30 years. This is why it is still finding it difficult to squeeze into the global supply chain.

RELATED NEWS

Counterfeit Apple resellers disappear after Apple issues ‘ultimatum’

Aviation manufacturing industry finds opportunity in niche markets

Nam Mai