A recent article published by the South Korean media outlet The Global Economy has sparked widespread attention. The article points out that Vietnam is rapidly emerging as a strong competitor to China in the manufacturing sector!
Since 2018, foreign investment in Vietnam has surged, and its competitiveness in terms of quality and price has reached levels comparable to China. This is not an empty claim. Take Samsung Electronics, for example. The smartphones manufactured by Samsung in Vietnam are of the same quality as those made in China, due to multinational companies imposing the same strict requirements on factories in both countries.
Vietnam’s export performance also strongly supports its growth trend. In 2023, Vietnam's export value reached 354billion.While there is still a significant gap compared to China’s 3.38 trillion, the growth trend remains steady. Particularly in niche sectors like furniture, coffee, and cashews, Vietnam has successfully secured global competitiveness. Multinational companies such as IKEA view Vietnam as a core production base, which demonstrates the effectiveness of the complete ecosystem that Vietnam has built in the furniture industry.
Vietnam’s greatest competitive advantage lies in labor costs. A report from PwC shows that, as of 2020, China's average hourly labor costs were more than twice those of Vietnam. Global brands like Nike and Patagonia have expanded production in Vietnam, increasing the country’s competitiveness in the apparel and footwear industries.
However, Vietnam's development is not without its challenges, and there are many obstacles to overcome. Chinese factories still have clear advantages in quality control, consistency, and flexibility. Additionally, China possesses a large skilled labor force, comprehensive supply chains, and advanced infrastructure. In terms of large-scale production systems and online sales channels, China is far ahead, with global e-commerce platforms like SHEIN and Temu outpacing Vietnam's Tiki.
Experts believe that for Vietnam to make the leap into advanced manufacturing, it urgently needs to ensure a steady supply of skilled labor and improve logistics and supply chains. Additionally, quality control issues among some smaller producers remain a challenge. Only by addressing these issues can Vietnam strengthen its competitiveness in high-end markets.
Vietnam’s rise is undoubtedly a new highlight in the manufacturing sector, but China’s deep-rooted manufacturing foundation and comprehensive advantages should not be underestimated.
