Vietnam May Step Into China's Footsteps as Next Manufacturing Hub, Reports The Journal of Commerce

Jun 14, 2010, 15:16 ET from The Journal of Commerce

NEWARK, N.J., June 14 /PRNewswire/ -- With rising labor costs and cultural shifts in China pushing manufacturers to look for new sourcing options, many are rediscovering Vietnam. Transportation leaders are responding with investment in the developing nation whose business managed to grow last year as others struggled.

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Vietnam's prime minister reported at last week's World Economic Forum on East Asia that its economy will grow 6.5 to 7 percent this year after expanding 5.3 percent in 2009. PIERS Global Intelligence Solutions, a sister company of The Journal of Commerce, forecasts increased U.S. imports from Vietnam of 41.6 percent and exports of 16.3 percent this year.

In the first four months of 2010, exports of computer and electronics jumped 40.8 percent, compared to the same period last year, said IMA Asia. Technology giant Intel will fuel that surge with a new packaging and testing plant in Ho Chi Minh City opening this year.

"In effect, we are seeing a very fast transformation of Vietnam's light industrial base," said Richard Martin, managing director of IMA Asia.

Infrastructure investment is growing to meet the demand. In the face of recession cutbacks, six leading container lines initiated direct Vietnam-U.S. services, and operators opened four new terminals, with two more expected for 2011.

This week's Cover Story examines the future of this dynamic country, the economic trends behind its growth and the opportunities and challenges — infrastructure, while improving, still lags far behind ChinaVietnam faces now and in the future.

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SOURCE The Journal of Commerce