Workers at an electronic products manufacturing firm in Vietnam (Photo: VNA)Hanoi (VNA) – The US website SeekingAlpha has described Vietnam as the preferred destination of foreign capital inrecent years with annual economic growth of 7 percent, twice as much as theworld average.
While agriculture continues to be a dominantsource of employment, much of Vietnam’s economic growth in the recent past hasbeen driven by the services and industrial segments, according to the website.
One of the reasons that make Vietnam moreattractive than other countries is its labour costs, which are half that ofChina and also considerably lower than its other manufacturing competitor –Mexico.
Seeking Alpha said Vietnam’s dominance lies inthe electronics manufacturing (36 percent) followed by footwear. Some notableUS names that have recently made inroads into Vietnam include Sourcify, CooperTyres, and Key Tronic.
The website cited a survey conducted by the USChamber of Commerce which showed the rate of respondents selecting Vietnam as theprimary choice for relocation grew from 17 percent in 2018 to 36 percent in2019.
Vietnam’s export to the European Union (EU) ispredicted to hit 60 billion USD by 2025. In the long run, it would be healthyfor the Southeast Asian country to have a more diversified source of exportcustomers and not rely on the US and China alone, according to SeekingAlpha.
The EU-Vietnam Free Trade Agreement is expectedto open up a market for Vietnam with a combined GDP of close to 2.2 trillionUSD. According to the deal, tariff on Vietnamese products such asgarments, computers, phones, apparel, footwear, textiles, general electronics,and farm devices will decline from 9.7 percent to 2 percent in 2025.
The website also mentioned the successfulprevention of COVID-19 in Vietnam, which has had a limited impact on the localtourism compared to other destinations. It cited data from Vietnam as showingthat in July 2020 more than 26,000 flights are expected to transport over 5 millionpeople, representing annual growth of 16 percent and 24 percent,respectively./.
VNA
