How China’s zero-Covid policy triggered a new wave of investor interest in Vietnam
- Vietnam emerged as an alternative manufacturing base to China during the trade war between the world’s two biggest economies
- Another wave of interest kicked off after Vietnam reopened its borders in March 2022 while China remained sealed off to the world
At a factory in the southeast Vietnamese province of Tay Ninh, on the border with Cambodia, 400 people work in shifts around the clock to turn spools of white thread into the colourful logo-emblazoned tape seen on sportswear.
The finished tape, ironed and neatly piled into boxes, is trucked to the port of Saigon in Ho Chi Minh City for shipment to customers, factory manager Max Lee said.
The factory, which opened in 2019 and quadrupled its workforce in three years, was born out of the impact of the United States-China trade war that broke out in 2018 and encouraged China-based manufacturers to move some production to Vietnam.
The factory is owned by a Hong Kong company, which asked not to be named because it did not want to give the impression it was leaving the mainland. Established in the 1980s, it had previously based all its production in the Chinese provinces of Guangdong and Jiangxi.
In 2019, after the trade war led to increased tariffs on US imports from China, the company decided to expand manufacturing to Vietnam.
“Our output is increasing and we hope to build another factory in the near future,” Lee said, pointing to an empty plot of land next to the factory.
“We hope to eventually expand the size of our workforce here from 400 to 1,000. That will be as big as our factory in Jiangxi.”
Duong Thanh Cong, deputy general director of Vietnamese energy supplier Thuan Hai, said the whole Tay Ninh industrial area was born out of the trade war.