Vietnam Projected to Become Asia’s Major Manufacture

03 Apr,2015

Vietnam may soon be Asia’s leading manufacturer considering its growing GDP. The country’s gross domestic product (GDP) is expected to reach 6.1% this year and 6.2% in 2016, the second highest growth rate in the region after India, according to an Asian Development Bank (ADB) report on Asia’s development prospects for 2015.

According to Vietnam’s Business Times, the country has the brightest future among the VISTA economies, which includes Indonesia, South Africa, Turkey and Argentina.

Despite the fact that Vietnam’s annual growth rate between 1998-2008 was 7.5%, due to issues with inflation — which slowed growth and labor competition — the country still has the opportunity to be a strong economy in Asia with its favorable geographical location, low-cost labor and large young workforce.

Vietnam could have the fastest economic growth rate in the world by 2050 as its local production units are prepared to compete and could be more competitive than Chinese businesses in the future, according to professionals network PricewaterhouseCoopers.

The political environment of the country also makes it ideal for Japanese companies looking to develop regional investment. Vietnam could even grow to be the major manufacturer in the world, replacing China, as China’s labor costs continue to rise.

Vietnam has been working to position itself as Asia’s number one manufacturer and persuade big brands to invest with its low-cost labor and the pending Trans-Pacific Partnership trade agreement. However, some say the economy could be hindered by low labor productivity.

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