4 ms·
Currently opening a nontrivial manufacturing facility in China. I've been flying to Vietnam at least once a month for the last 3 months. There are definitely pe
by contingencies 7y ago
Currently opening a nontrivial manufacturing facility in China. I've been flying to Vietnam at least once a month for the last 3 months. There are definitely people moving production there, eg. I know one guy for a German group moving factories from China to south Vietnam. We had a chat, and it turns out we're getting cheaper industrial facility leasing here in Zhuhai than they get outside of Ho Chi Minh City. Additionally, we have immediate access to the world's largest industrial supply chain, are only 1 hour from Hong Kong, Macau, Shenzhen, etc. and ~200 million people. Marginally higher cost of living, but it's not a bad deal. Less crazy motorcycle road deaths and more nature here. IMHO Vietnam's big draw versus China is cross-border transactional banking - that stuff's a hassle here. On balance we'll stay put, thanks.
- baybal2 7y agoSame for quite a few of our clients. Many companies were asking us for the "Vietnam option" lately, and are surprised when manufacturing in Vietnam comes out more expensive than in China even with tariffs, and usually results in them moving from a Chinese factory in China to Chinese factory in Vietnam that will still be ran by Chinese engineers, Chinese know-how and use Chinese parts. The thing is that labour is not a big part of manufacturing costs even even for fairly low value goods, and are truly microscopic for higher value electronics. 30 years of Chinese manufacturing already drove out nearly all labour intensive processes out for production of light industry goods. Chinese companies have moved to heavily mechanised manufacturing quite long ago. Unless somebody can master custom tooling making as well as Chinese companies, they are not going to catch up.