Foreign firms shift to Vietnam due to US-China trade war
Foreign firms shift to Vietnam due to US-China trade war
Yokowo and Zhejiang Hailide New Material’s plan to relocate their factories from China to Vietnam shows that Vietnam will be one of the leading destinations for investors operating in China due to the impact of the US-China trade war.
According to newswire Nikkei.com, Yokowo, which exports 70 per cent of its goods made in China, plans to accelerate its manufacturing operations to Vietnam. It will complete the relocation of production of US-bound components by the end of this year instead of the mid-2020s as previously planned.
Yokowo, which is known as a famous Japanese trademark producing, assembling, and processing communication equipment used in cars, opened the factory in Vietnam in the end of March 2012 in Dong Van Industrial Park, Ha Nam province.
In 2017, the company inaugurated the third phase of the factory with the total investment capital of VND10 billion ($428,262).
Along with Yokowo, Zhejiang Hailide New Material, a Chinese polyester producer, plans to spend $155 million on building its first overseas plant in Vietnam, planning to bring it online by mid-2020. The company expects 20 per cent of the plant's sales to be generated from exports to the US.
Yokowo and Zhejiang Hailide New Material are two outstanding examples of the wave of investors relocating facilities from China to other countries, including Vietnam, due to the impact of the US-China trade war.
Increasing trade frictions between the US and China will likely prompt more South Korean and Japanese firms to come to Vietnam instead of China, to produce and export to the US.
Nguyen Duc Tiep, a representative of the Quang Ninh Investment Promotion Centre, told VIR that many Japanese firms have been operating in China, however, they want to expand their investment markets to shun risks caused by rising production costs in China and the US-China trade war, which is making it hard for Japanese firms to export products to the US from China.
