Vietnam’s recent economic good fortune has not gone unnoticed. The U.S President Donald Trump decried the southeast Asian state as “one of the worst abusers” of trade tariffs — helping US companies to avoid high export levies. The Times reports.
According to The Times, Vietnam is becoming a hub for technology production, with the likes of Google, Nintendo and Apple recently announcing plans to move some manufacturing there.
But professional stock-pickers have beaten them to it. The managers of global emerging markets funds have steadily been increasing their exposure to the communist country for years.
One in five emerging markets funds is invested in Vietnamese companies, according to data from Copley Fund Research.
The firm analysed 193 open-ended funds from around the world, with a total of more than $1.2 trillion.
The high population and population structure give Vietnam advantages in comparison with other regional countries. In 2018, Vietnam had 94.6 million people. Like Indonesia and Malaysia, Vietnam has a young population with the number of people aged over 65 just accounting for 6-7 percent, while the figure is 11-12 percent in China and Thailand.
Young people of working age (15-54) account for 60-62 percent of total population. The figure is nearly the same as Malaysia (57 percent) and Indonesia (59 percent) and Vietnam has to compete with the two countries to catch the eyes of big manufacturers considering where to move.
However, Vietnam has a big advantage – its GDP growth rate is the highest in Southeast Asia. GDP is expected to reach 6.8 percent in 2019, higher than the Philippines (6.2 percent), Indonesia (5.8 percent), Malaysia (4.5 percent), Thailand (3.5 percent) and Singapore (2.4 percent), according to ADB.
Meanwhile, according to WB, the labor cost in manufacturing sector is very low, just $237 a month in 2018, higher than the $190 in Indonesia, but much lower than $866 in China, $924 in Malaysia and $412 in Thailand.
The cost of building production workshops in Vietnam is very attractive, which is lower than China, India, Malaysia and even Indonesia. The rent of workshops and storehouses in Vietnam is $380 per square meter, while it is $400-580 per square meter in the other four countries.
Vietnam is also attractive thanks to its high industrial production growth index, 9.6 percent in the first seven months of the year.
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