Manufacturers want to quit China for Vietnam, but find it impossible
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Re: Manufacturers want to quit China for Vietnam, but find it impossible
#2This tariff situation is quickly becoming an amazing opportunity for developing countries. The labor shortages being talked about can only be resolved through higher wages, which means that the people at the bottom will get a cut of the new money. In the end the world will be a lot richer and the money will be in the hands of relatively livable countries like Vietnam. (The Vietnamese government is actually pretty good in terms of freedoms.)
It's also politically preferable for the US to depend on a hundred small countries instead of one big competitor. It may also help cushion the next global recession, as each of these international markets will be less correlated with each other than one company in China is with another company in China.
Chinese companies are very tightly integrated with the government's balance sheets, meaning that you can't diversify within China. If one company goes under that means the subsidies ran out, and that means all the other subsidies are running out, which means the economy is toast.
Re: Manufacturers want to quit China for Vietnam, but find it impossible
#3This tariff situation is quickly becoming an amazing opportunity for developing countries. The labor shortages being talked about can only be resolved through higher wages, which means that the people at the bottom will get a cut of the new money. In the end the world will be a lot richer and the money will be in the hands of relatively livable countries like Vietnam. (The Vietnamese government is actually pretty goo…
It could backfire if China sees these smaller countries as a threat and moves to block them. Vietnam borders with China, no doubt they are as dependent on China as, say, Canada is with the US. I could see China saying "hey if you trade with the US, we're putting 20% on your exports to China"
Re: Manufacturers want to quit China for Vietnam, but find it impossible
#4This tariff situation is quickly becoming an amazing opportunity for developing countries. The labor shortages being talked about can only be resolved through higher wages, which means that the people at the bottom will get a cut of the new money. In the end the world will be a lot richer and the money will be in the hands of relatively livable countries like Vietnam. (The Vietnamese government is actually pretty goo…
It could backfire if China sees these smaller countries as a threat and moves to block them. Vietnam borders with China, no doubt they are as dependent on China as, say, Canada is with the US. I could see China saying "hey if you trade with the US, we're putting 20% on your exports to China"
Wouldn't happen. The Vietnamese hate the Chinese more than the Chinese hate the US. It's more likely that the US eventually extends tariffs to other SE Asian countries.
That said, I think the real story is companies preemptively shifting manufacturing out of SE Asia entirely in order to get ahead of the next wave of offshoring.
Re: Manufacturers want to quit China for Vietnam, but find it impossible
#5[deleted]
Re: Manufacturers want to quit China for Vietnam, but find it impossible
#6This tariff situation is quickly becoming an amazing opportunity for developing countries. The labor shortages being talked about can only be resolved through higher wages, which means that the people at the bottom will get a cut of the new money. In the end the world will be a lot richer and the money will be in the hands of relatively livable countries like Vietnam. (The Vietnamese government is actually pretty goo…
It could backfire if China sees these smaller countries as a threat and moves to block them. Vietnam borders with China, no doubt they are as dependent on China as, say, Canada is with the US. I could see China saying "hey if you trade with the US, we're putting 20% on your exports to China"
China and Vietnam historically haven't gotten along well anyway.
And I'm not so sure how many Asian nations would go along with that whole situation. Would be a lot of doubling down there by China... and when / if THEY want to offshore some things, where do they go?
Re: Manufacturers want to quit China for Vietnam, but find it impossible
#7Earlier quoted context omitted.
It could backfire if China sees these smaller countries as a threat and moves to block them. Vietnam borders with China, no doubt they are as dependent on China as, say, Canada is with the US. I could see China saying "hey if you trade with the US, we're putting 20% on your exports to China"
China and Vietnam historically haven't gotten along well anyway. And I'm not so sure how many Asian nations would go along with that whole situation. Would be a lot of doubling down there by China... and when / if THEY want to offshore some things, where do they go?
My understanding is that China is offshoring a lot of stuff to Africa. Wages are still lower there.
Re: Manufacturers want to quit China for Vietnam, but find it impossible
#8Earlier quoted context omitted.
China and Vietnam historically haven't gotten along well anyway. And I'm not so sure how many Asian nations would go along with that whole situation. Would be a lot of doubling down there by China... and when / if THEY want to offshore some things, where do they go?
My understanding is that China is offshoring a lot of stuff to Africa. Wages are still lower there.
China has been offshoring to SE since years ago too.
Re: Manufacturers want to quit China for Vietnam, but find it impossible
#9[dead]
Re: Manufacturers want to quit China for Vietnam, but find it impossible
#10Earlier quoted context omitted.
It could backfire if China sees these smaller countries as a threat and moves to block them. Vietnam borders with China, no doubt they are as dependent on China as, say, Canada is with the US. I could see China saying "hey if you trade with the US, we're putting 20% on your exports to China"
Wouldn't happen. The Vietnamese hate the Chinese more than the Chinese hate the US. It's more likely that the US eventually extends tariffs to other SE Asian countries. That said, I think the real story is companies preemptively shifting manufacturing out of SE Asia entirely in order to get ahead of the next wave of offshoring.
The fact that they hate each other lends even more credence to my theory - it’s that much easier to put tariffs on them. 25% of their imports and 14% of their exports are with China [1], China could definitely hurt Vietnam if they become too close with the US.