The reason why Vietnam's exports have grown so fast in recent years is that many international enterprises have moved their production lines to Vietnam in recent years. At present, most of Vietnam's export products are actually contributed by foreign-funded enterprises, and the proportion of local enterprises is relatively small. For example, many well-known enterprises such as Apple, Nike, Adi, Dell and Foxconn have set up factories in Vietnam, and a large number of international enterprises have invested in Vietnam, which has directly driven the growth of Vietnam's exports. The reason why these enterprises are willing to invest in Vietnam is actually nothing more than several factors.
First, Vietnam's relatively cheap labor. Compared with China, Europe and America, the current Vietnamese labor force is really low, and most of the labor costs are basically between 65,438 yuan+0,500-2,500 yuan per month. For some labor-intensive industries, Vietnam's cheap labor is still very attractive, which is also an important reason why many enterprises have moved their production lines to Vietnam.
Second, Vietnam has more preferential policies. In recent years, Vietnam is undergoing drastic reforms. In order to attract foreign investment, they have introduced many preferential policies, such as tax preferential policies and land preferential policies. Making full use of these policies can reduce the production cost of enterprises, which is also one of the important reasons for attracting international enterprises to invest.
Third, Vietnam's exports have certain advantages. In recent years, Vietnam has been negotiating trade liberalization with various countries and regions, and has finalized many free trade agreements. After these free trade come into effect, Vietnam's exports to some countries can enjoy relatively low tariffs. For example, at present, Vietnam exports to Europe, the tax revenue is relatively low, and many products can even achieve zero tariffs. It is precisely because of this tariff advantage that many enterprises put their production lines in Vietnam and then export their products from Vietnam to European and American countries, which can reduce tariffs and thus improve their price advantage. Therefore, under the comprehensive influence of various factors, the attraction of Vietnam has really become stronger and stronger in recent years. More and more enterprises have transferred their production lines to Vietnam, and Vietnam's economy has also achieved rapid growth. Some even predict that Vietnam is likely to become the next developed country in Asia.
But I think this prediction is a bit too optimistic. First of all, we do not deny that Vietnam's current economic and foreign trade development is indeed rapid, but this is based on the premise that Vietnam is very attractive to foreign-funded enterprises. However, with the increasing scale of Vietnamese manufacturing industry and higher labor costs, their problems will certainly be exposed, mainly in several aspects.
First, labor costs have risen rapidly. Since the beginning of 2022, many international orders have been transferred to Vietnam for some reasons, such as repeated global epidemics. As a result, many Vietnamese factories have received soft orders, some of which have been scheduled for the end of the year. In order to cope with these orders, some factories in Vietnam can only keep recruiting people. In order to attract workers, they even offered a salary of 3,000 to 3,500 yuan, but even if the salary was high, they still couldn't recruit workers.
The salary between 3000 yuan and 3500 yuan is actually similar to that in some parts of the central and western regions. Moreover, according to the current growth rate of Vietnam's foreign trade, due to labor shortage, their wages may even continue to rise in the future. It is not ruled out that the wages of Vietnamese workers may reach the wages of ordinary workers in some areas along the eastern coast of China in the next few years. Once workers' wages rise, Vietnam's labor costs will gradually drain, and its attractiveness to some labor-intensive industries will naturally decline.
Second, the depth of the industry is limited. Many people see the rapid development of Vietnam's manufacturing industry, and even think that Vietnam may replace China as the world's factory, which is more like a joke. The industrial depth of Viet Nam can't compare with that of China. China's land area, population size and market size are much larger than Vietnam's, so its industrial depth is much stronger than Vietnam's. The land area of Viet Nam is only 329,000 square kilometers, which is almost the same as that of a province in China. Moreover, most of Vietnam's territory is dominated by mountains and relatively few plains, which determines that Vietnam's industrial layout space is limited. But when it comes to this place, many people may think of some European countries, and think that some European countries have small land areas, and even many countries are smaller than Vietnam. They are examples of Vietnam.
I think it is impossible to compare the development of the two countries across time. Europe can develop because they have great advantages in special historical periods, especially during the 1 industrial revolution and the second industrial revolution, so they have a lot of primitive accumulation. For Vietnam, in fact, many things have to start from scratch and draw a picture on a blank scroll, which is much more difficult than many European countries.
Third, the technical level is limited. Although Vietnam's scientific and technological level has been improving in recent years, there is a big gap between Vietnam's scientific and technological level and some developed countries and even some advanced countries in Asia from a global perspective. The level of science and technology is ineffective if a lot of money and manpower are invested in a short time. Science and technology need accumulation and precipitation, and need strong education as the foundation. Without decades of development, you can't greatly improve the level of science and technology.
But for Vietnam, at present, they may face a difficult problem, that is, in the context of rising labor costs, if some local high-tech products cannot be cultivated, Vietnam's export competitiveness will decline in the future, and you can't compare with other Southeast Asian countries or some South Asian countries such as India. So in the next 10 year or so, I think Vietnam may fall into a bottleneck similar to the middle income trap. As for whether the development of Vietnam is as we predicted, we will wait and see.