EU: Vietnam Growth Prospects Positive
Jul. 8 – Vietnamese economic growth prospects are positive said Sean Doyle, the head of the European Union’s delegation to Vietnam yesterday, adding that the prospects for EU investment in the country were also strong.
The comments come as manufacturing in China appears to be coming more expensive in the light of employment unrest, increasing salary demands and higher welfare payments there.
Doyle pointed out that a lack of investment in infrastructure within the supply chain had a negative effect on the country and was leading to high imports of raw materials and machinery, much of which should be sourced or manufactured from within the country. The EU remains the second largest market for Vietnamese goods, accounting for some 20.4 per cent of imports of Vietnamese products, behind the United States.
Vietnam has however slowly begun to make inroads into regional Chinese dominance of low end manufacturing of items such as shoes and garments where low labor, welfare and operational costs are attracting foreign investors away from the rising costs in China. A study by the Japan External Trade Organization found that a Vietnamese manufacturing worker earned US$101 a month against US$217 in China. While China remains significantly ahead of its neighbor in terms of supply-chain infrastructure, Vietnam is moving to address its weaknesses and the future growth of the nation will be dependent on how the government is able to address this key challenge.
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