China joins supply chain shift and wants its hi-tech firms to invest in Vietnam

The shift of Chinese language manufacturing to Vietnam is about to “speed up” after a excessive degree assembly in Beijing.

Vietnam’s common get together secretary Nguyen Phu Trong met President Xi, who mentioned China deliberate to construct a “steady provide chain” with its southern neighbour.

He mentioned: “China is prepared to speed up linking growth methods with the Vietnamese facet, promote connectivity between the 2 nations and collectively construct a steady industrial provide chain system.”

This would come with China encouraging its tech corporations to put money into Vietnam, Mr Xi mentioned, including that the 2 nations also needs to promote cooperation on healthcare, the digital economic system and environmental points.

China is already Vietnam’s largest buying and selling associate, with bilateral commerce growing 24% kast yr, to $165bn.

Moreover, whereas a lot has been manufactured from the transfer by overseas corporations to diversify provide chains away from China – given rising wages and disruption from the zero-Covid coverage – Vietnam insiders are fast to notice that “a big half” of the shift is from Chinese language producers.

Andre Wheeler, CEO of Asia Pacific Connex and an professional on China’s Belt & Highway Initiative, mentioned China could also be trying to put money into Vietnam’s hi-tech sector, given the commerce restrictions imposed on it by the US and EU.

He advised The Loadstar: “Vietnam has proved to be a sexy different manufacturing funding for worldwide organisations. This has damage Chinese language manufacturing functionality to a point, however the greatest menace has been the transfer of high-end know-how functionality into the likes of Vietnam; each TSMC and Intel have moved important microchip manufacturing and design.”

In the meantime, Chinese language e-commerce corporations are additionally organising store in Vietnam. Amazon Vietnam mentioned it had seen an 80% uptick in exporters this yr, thanks partially to “an inflow” of relocating Chinese language e-commerce sellers.