Author: Tronserve admin
Thursday 29th July 2021 11:18 PM
Vietnam Factories Buoyed by Diversion from China
More hot beds for factories are springing up in Asean - mainly as Asian companies build up shorter, more local supply chains, a McKinsey Global Institute report has suggested.
Yet, even while regional markets such as Vietnam rise to the plate to make labour-intensive goods at low cost, other value-added factors becomes more essential, the report said.
As a wealthier China retreats from labour-intensive manufacturing, South-east Asian countries such as for example Vietnam, Cambodia and Indonesia have taken over those jobs.
Vietnam’s Hai Phong and Ho Chi Minh City, together with Bekasi in Indonesia, have tempted swathes of greenfield investment, exclusively into electronics production.
With the funds flowing into Vietnam - mostly from South Korea and Japan, as Asia becomes more internally connected - McKinsey noted that “a new set of cities begins to benefit from the influx of capital”, through the creation of factories, roads and jobs.
However the report also revealed that industry value chains now rely more greatly on research and development, innovation, and value-added services.
“These shifts, combined with a wave of new manufacturing and logistics technologies, mean that countries across Asia will need to alter their investment priorities and develop new types of skills to compete in a more knowledge-intensive trade landscape,” the analysts wrote.
Source: THE BUSINESS TIMES