Vietnam has room to develop high-value manufacturing: Cushman & Wakefield
Vietnam’s high-value manufacturing is expected to grow, with the government intent on increasing manufacturing’s share of the economy from 25% to 30% by 2030 by attracting more high-value manufacturing investment, said the “Strength through Diversification: Opportunities across Asia Pacific” report by Cushman & Wakefield.
The global commercial real estate services firm affirmed that Vietnam has the room to accommodate such growth with a strong concentration of electronics production in the northern region (Hanoi, Hai Phong), while the southern region (Ho Chi Minh City, Binh Duong, Dong Nai) has a mix of food, consumer goods and electronics manufacturing.
According to the report, Vietnam is a key beneficiary of China plus manufacturing strategies due to close geographical proximity and wider regional/global connectivity.
Aside from its strategic location, Vietnam remains cost-effective with significantly lower labour costs compared to China. Further benefits come from a balanced mix of high value manufacturing such as electronics and low value manufacturing such as garments, footwear and food.
In its report, Cushman & Wakefield said that the ASEAN bloc is fast establishing itself as a major growth focus within the Asia-Pacific, attracting healthy levels of foreign direct investment which are expected to reach at record peak in 2022 of US$223 billion.
Much of this growth has come as US- and European-based corporations continue to expand and diversify their operations within the region, though Chinese manufacturers also continue to expand their presence. The northern region of Vietnam, such as Hai Phong and Hanoi, has attracted strong investment from China’s and the Republic of Korea’s manufacturers given its close proximity as well as its strong geographical connectivity regionally and globally, it added.
