China’s personal data controls, supply chain challenges, and the decoupling of US companies kicked off the idea of China Plus One. Vietnam holds pride of place as Asia’s number one preferred alternative to China. But moving to a ‘plus one’ has not been that easy.
‘Moving some operations out of China is part of our global resiliency strategy. But, it's been a struggle when we try to pick up our shop and move it elsewhere. We are finding that it's not as easy as we had thought. China has a very well-oiled machine.’
Vietnam may have reached its limits as skilled talent has become scarce.
‘There is a talent shortage in Vietnam. A big company comes in and sucks up all the engineers, so there isn’t much left for anyone else.’
Corruption allegations, tangled regulations, and infrastructure under pressure from high growth are damaging Vietnam’s reputation as China’s Plus One.
‘Vietnam is one country which keeps me awake at night. Every day they announce something new. The worst part is that there is no consultation before new regulations come out.’
Yes, but...
‘Our view of Vietnam is positive. They've just reached a point where they grew too fast, but it has inherent strengths in its economy. Challenges related to the infrastructure and bureaucracy are much easier to handle in Vietnam than in India or Indonesia.’
What’s next: Is Vietnam Ready for Business? will be a topic of discussion at our upcoming Strategy Evening, April 17.
Contact us to learn more.
