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Vietnam sees great opportunities as US businesses leave China

VietNamNet Bridge - One out of every four US businesses in China have left or have plans to leave China. And Vietnam could be the next destination for them.
VietNamNet Bridge - One out of every four US businesses in China have left or have plans to leave China. And Vietnam could be the next destination for them.

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Many US businesses have been leaving China over the last three years. Some have left, while others are considering leaving. This was prompted by higher labor costs in China. As much as 10 percent of businesses left because they found policies unreasonable.

International analysts said that many other Asian countries have emerged as rivals to China in attracting foreign investment thanks to their low labor costs. 

Meanwhile, China has conducted investigations on a large scale targeting foreign companies, forcing some of the companies to pay huge fines to the local authorities.

Vietnam could be a link for US in implementing the strategy amid the US fear about the strong rise of China.

Lester Ross, deputy chair of Amcham in China, has been quoted as saying that some policies has made China go down the wrong path.

As a result, US companies feel they are not welcomed in China and they tend to leave.

VnExpress quoted sources said that the next destinations for the US companies leaving China could be North America and developing countries in Asia.

The movement of the US companies leaving China is bad news for the Chinese economy, but it could bring great opportunities to Vietnam, according to analysts. The acceleration of US investment in Vietnam recently has shown this trend.

Amcham’s latest report showed that two-way trade turnover between Vietnam and the US increased from $29.6 billion in 2013 to $36.3 billion in 2014, up 130 times in comparison with 1994.

Two-way trade turnover is expected to reach over $36 billion. The US ranks seventh among the biggest foreign direct investors in Vietnam, with 699 projects registered, capitalized $10.7 billion. 

Nguyen Tri Hieu, a renowned economist, when analyzing the statistics, commented that speeding up investment in Vietnam was a normal action that a super economic power would take.

He said this could be a part of the US’s pivot strategy in Asia, which to some extent, could bring opportunities to Vietnam.

An expert, agreeing with Hieu, said that Vietnam could be a link for US in implementing the strategy amid the US fear about the strong rise of China.

Vietnam has great the opportunities to attract US investment, but it is unclear if it can grab the chances.

However, Hieu said that what Vietnam needs to do now is not to try to attract investment at any cost, but to attract investment selectively.

“It is necessary for Vietnamese agencies to take measures to prevent transfer pricing conducted by foreign invested enterprises,” he said.


Dat Viet


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