Vietnam wins the US-China trade war this year, arguably. Among the target countries for relocation during the trade war, Vietnam is one of the largest beneficiaries, if not the largest.
According to consultancy firm IHS Markit, US imports from Vietnam gained 34.8% from January to September 2019. This is in contrast to the 5.8% gain during 2018.
The exponential escalation is not without reason. Among all, the most immediate cause is due to Chinese firms’ intention to bypass tariffs by supply components to Southeast Asia countries who export to the US.
For Vietnam, the products to export vary and contribute to roughly 7.9% of the country’s GDP. Accordingly, the products to export are regarding electric apparatuses for phone, parts for office and automatic data-processing machines.
Prime Minister Nguyen Xuan Phuc said the country’s GDP growth will exceed 6.8% this year. Besides gaining benefits from export and import, Vietnam also facilitates relocation for companies that suffer from the US-China trade war to ASEAN regions to avoid additional tariffs.
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Vietnam Unable to Maximize Benefits from US-China Trade War
Vietnam is currently unable to maximize the benefits it gets from the everlasting trade war. Reportedly, the reasons are due to a lack of experts and decent infrastructure.
ManpowerGroup, a recruitment firm, published a survey that merely 12% out of approximately 57.5 million Vietnamese workers has particular expertise. In addition, the rest of the population is mostly agricultural workers in rural areas.
Vietnam has always been struggling with the lack of experts, specifically IT technicians, engineers, and managers. The country’s vocational education and training (VET) programs are currently incapable of generating more experts.
Furthermore, the country also suffers from a lack of infrastructure. Starting from poorly-accessible roads up to the availability of docks has become the problem for the country to grow.
The recent instance is during the escalation of cargo numbers from China to the country. In 2018, there was around 530 million tons of cargo shipped through Vietnamese ports, which exceeded the maximum capacity of 470-500 million tons throughout all 44 seaports.
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