‘China is on the rise’ is a statement that we hear all too often. However, China’s growth does not only appear to be benefiting China alone. Vietnam has been able to use this neighboring country’s growth to benefit its own economy. Vietnam has a lot of appeal for international business and has begun to make a name for itself through China's success.
Vietnam is appealing to global companies for several reasons. They have free trade agreements set in place that create an open environment for trade. However it is only in the last two decades that Vietnam has become more open to global trade. That being said, it has grown immensely since then. A trade agreement with the United States in the 90’s helped textile and clothing manufacturers in Vietnam export to the US to thrive as well.
Vietnam also has a large growing population and cheap labor making it appealing for business. This has helped Vietnam has become a part of China's manufacturing power. The ease of free trade makes manufacturing in this smaller country simpler. China is often known for cheap labor, but Vietnam’s minimum wage is about half of that in China. This opens up manufacturing opportunities for large global corporations that would otherwise look to China.
Intel and Canon have both opened factories in Vietnam in the last year. Because of the increase in the number of factories, Vietnam has become a large part of China’s supply chain. Vietnam is now ready for foreign investment and is ready to grow as a whole. Vietnam is certainly not on China’s level as far as the ease of doing business yet, but it is on its way.