Based on insights into the demand trends of industrial parks in Southeast Asian countries, more and more Chinese manufacturers use Vietnam as a production base to avoid US tariffs.
According to reports, one of Vietnam’s largest real estate providers of this kind said that Chinese companies are expected to account for half of its land sales contracts this year and next, up from about 12% in 2018.
The head of the company’s industrial development department said: “People are shifting some production.”
“This will have a significant impact on Vietnam. Due to the different economic scales, for China, a drop of water may be a flood for us.”
Not only Vietnam, Thailand has also introduced incentives including tax cuts to attract manufacturers seeking to circumvent tariffs imposed by the United States and China. Thai officials said companies including Sony, Sharp and Harley-Davidson are moving some manufacturing to the country.
However, recent data shows that Vietnamese competitors have taken the lead in attracting producers.
The net amount of foreign direct investment that Chinese companies apply to Thailand is soaring. According to data from the Investment Commission of Thailand, it has increased fivefold in the first half of 2019 compared to the same period last year.
The total value of applications from China and Hong Kong is approximately US$1 billion, second only to Japan. Japanese companies have long been manufacturing in Thailand.
Thailand’s largest real estate provider of this type, WHA Corp., is expected to add 6 industrial parks to its current list of 10 in Thailand and has begun selling its real estate in Vietnam.
The head of the company’s industrial development department does not think that Thailand and Vietnam are competitors. He said that “every country has advantages and disadvantages.” He said that it takes a long time to build a factory in Vietnam, but Thailand lacks labor.
Therefore, investing in Vietnam is a good opportunity. If you want to know more about Vietnam, please contact YAXIN .
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