Manufacturers want to quit China for Vietnam, but find it impossible • Hacker News Board

Re: Manufacturers want to quit China for Vietnam, but find it impossible

#71

Post by latchkey » Thu, Aug 22, 2019, 9:36 AM UTC

apatters wrote: post #69

latchkey wrote: post #28

I'm from the bay area and moved to Vietnam 3 years ago. I'm watching all of this happen in realtime. I've recently completed a 8500km motorbike trip around all of Vietnam, southern Cambodia and Northern Laos. In the south of Vietnam, HCMC, there is massive growth. Huge amounts of construction. The city is over populated and growing rapidly. Millions of kids work for $200 a month. In the north of Vietnam, there is man…

The Chinese funded development projects in Laos and Cambodia have been going on for a decade, they predate and have nothing to do with US tariffs. Because of a fragmented and underdeveloped road system it's hard to transport goods by land between China and Southeast Asia today, that's the main Chinese motive here. (Yes, that also includes gaining better access to the Andaman Sea, which simplifies shipping to India, A…

To be clear, I'm not saying that these projects started because of the tariffs. It is clear from the progress I've seen first hand, that they have been going on for a long time now... and will continue for a long time. The scale of all of this is utterly massive.

What is sad though is that the Chinese are basically taking over two more SE Asian countries and nobody is doing anything about it. Vietnam and Thailand are strong enough to hold onto things, but Laos and Cambodia are not. Every single person I talked to that was local was not happy about it at all.

What was explained to me is that they move their families in for these huge construction projects, and then buy up all the surrounding land. Most of the 'for sale' signs in Laos are written in Chinese.

Re: Manufacturers want to quit China for Vietnam, but find it impossible

#72

Post by marvin » Thu, Aug 22, 2019, 9:53 AM UTC

panda88888 wrote: post #68

saiya-jin wrote: post #66

Earlier quoted context omitted.

What is beneficial to US might not be beneficial to anybody else (meaning >90% of the world). If I take things to the extreme, it would probably be beneficial for US security and economy to have rest of the world as slaves. Not so much for us. Previous US governments seemed to have more moral constraints in this regard compared to current one (with great power comes great responsibility and all that). Interesting tim…

I agree with you on the fact that what’s beneficial to the US is not necessarily beneficial to other nations. And I agree with you that the current US president is less restraint than previous administrations. This is probably going to be controversial, but I personally think the US is relatively restrained in its meddling in other nation’s domestic politics given its power and influence. Every nation has its sphere…

China will be a tyrant. How can anyone imagine otherwise, seeing how it currently treats its perceived internal threats?

Re: Manufacturers want to quit China for Vietnam, but find it impossible

#73

Post by esjeon » Thu, Aug 22, 2019, 10:00 AM UTC

Gosh, what a click-bait title. I guess this is a politically biased article, trying to attack Trump. It's not that I like the tariff nor the fight b/w the countries, but it's just that the title is straight wrong.

"China Exodus" has been a thing for almost a decade, meaning that there has been good reasons to leave China other than that little tariff thingy. Rising labour costs, ever-increasing regulations, unexplained government actions, a large number of Chinese (copycat) competitors, government-backed industrial espionage, corruption, lack of justice, etc. It has been like this since mid 2000s, and many global corporations have either already moved their critical production lines or set up backups outside of China.

Quitting is impossible? Nope. Totally possible and many have already done that since years ago. The actual problem is small businesses who can't afford to build new suitable production lines in a hurry. China is indeed the best factory right now, since it's almost a grab-and-go. But that doesn't mean it's going to be the best for everyone nor forever.

Re: Manufacturers want to quit China for Vietnam, but find it impossible

#74

Post by baybal2 » Thu, Aug 22, 2019, 10:09 AM UTC

contingencies wrote: post #36

Currently opening a nontrivial manufacturing facility in China. I've been flying to Vietnam at least once a month for the last 3 months. There are definitely people moving production there, eg. I know one guy for a German group moving factories from China to south Vietnam. We had a chat, and it turns out we're getting cheaper industrial facility leasing here in Zhuhai than they get outside of Ho Chi Minh City. Additi…

Same for quite a few of our clients. Many companies were asking us for the "Vietnam option" lately, and are surprised when manufacturing in Vietnam comes out more expensive than in China even with tariffs, and usually results in them moving from a Chinese factory in China to Chinese factory in Vietnam that will still be ran by Chinese engineers, Chinese know-how and use Chinese parts.

The thing is that labour is not a big part of manufacturing costs even even for fairly low value goods, and are truly microscopic for higher value electronics. 30 years of Chinese manufacturing already drove out nearly all labour intensive processes out for production of light industry goods.

Chinese companies have moved to heavily mechanised manufacturing quite long ago. Unless somebody can master custom tooling making as well as Chinese companies, they are not going to catch up.

Re: Manufacturers want to quit China for Vietnam, but find it impossible

#75

Post by Haga » Thu, Aug 22, 2019, 10:13 AM UTC

ThrustVectoring wrote: post #42

josephpmay wrote: post #17

1) For anyone wondering, yes, many of these companies would have the same (or worse) problems if they tried to manufacture in the US. Our domestic supply chains for a lot of industries have dried up (or never developed). US factories also usually have higher minimum quantities and take much longer to tool up. 2) I'm surprised the article didn't mention Africa at all. A lot of Chinese industrialists are investing in A…

The "natural" distribution of manufacturing capacity roughly mirrors the population distribution, and Africa is definitely under-provisioned in this respect. Respect for property rights and political stability is definitely a downside, though. The first industrialists that manage to build out after the last land war or socio-political upheaval are going to get some really nice returns, though.

Respect for contracts Respect for time Nothing in Africa ever works long. People receive there earnings and quit the job for a week without warning.

Re: Manufacturers want to quit China for Vietnam, but find it impossible

#76

Post by Haga » Thu, Aug 22, 2019, 10:17 AM UTC

dirtyid wrote: post #21

It took China almost 30 years to cultivate economic development zones into the logistics chain to build the first iPhone. That kind of development can't be replicated in a few years, is likely out of reach for smaller nations (read anyone except India) or viable in a geographically distributed fashion. The problem isn't just moving factories but have a geographically centralized logistics chain where thousands of com…

Never understood why factories are not on towable ships in the first place..

Re: Manufacturers want to quit China for Vietnam, but find it impossible

#77

Post by roboys » Thu, Aug 22, 2019, 10:29 AM UTC

BurningFrog wrote: post #34

LeanderK wrote: post #13

Earlier quoted context omitted.

> The Vietnamese government is actually pretty good in terms of freedoms. Wait, what? They recently kidnapped an ex-party member in germany. It was 2017 or so. I can't believe that a country which honors you freedom would do something like this.

The US assassinates its own citizens without trial occasionally. Don't judge by the anomalies, judge by the everyday life for regular people.

US police are the 6th leading cause of African American deaths.

I watched an HK detainee get tortured in a hospital in horror, then remembered we kill thousands of unarmed people every couple years without any trial (many of whom are innocent) and 50-60% of victims are either mentally or physically disabled in some way. Many of them get tortured in similar ways if they make it to prison.

In a different framing, the US looks pretty horrible in comparison to China. It's just that we have gotten used to our own brand of stink.

Re: Manufacturers want to quit China for Vietnam, but find it impossible

#78

Post by roboys » Thu, Aug 22, 2019, 10:45 AM UTC

ThrustVectoring wrote: post #42

josephpmay wrote: post #17

1) For anyone wondering, yes, many of these companies would have the same (or worse) problems if they tried to manufacture in the US. Our domestic supply chains for a lot of industries have dried up (or never developed). US factories also usually have higher minimum quantities and take much longer to tool up. 2) I'm surprised the article didn't mention Africa at all. A lot of Chinese industrialists are investing in A…

The "natural" distribution of manufacturing capacity roughly mirrors the population distribution, and Africa is definitely under-provisioned in this respect. Respect for property rights and political stability is definitely a downside, though. The first industrialists that manage to build out after the last land war or socio-political upheaval are going to get some really nice returns, though.

The underdevelopment of Africa is/was a deliberate decision of the west that China is undoing.

Smart investors realize China/India's future economic status depends on being able to offset loss of western demand/trade with direct trade with African markets.

This is generally better for the whole planet but not if you have a "zero-sum game" mentality (seems more common in the West than East).

Re: Manufacturers want to quit China for Vietnam, but find it impossible

#79

Post by roboys » Thu, Aug 22, 2019, 10:55 AM UTC

runn1ng wrote: post #40

I live in Vietnam, people here say Trump’s Chinese tariffs have built many people’s new houses.

China, I expect has a bigger picture view. Our small brain framing "Move Manufacturing Good", doesn't play out when you realize China is an Asian power, not just an isolated country.

China's economy benefits from most business that enters the Asian continent, either directly or indirectly, and this "economic proximity" benefit only increases as they develop infrastructure (domestically and internationally) that streamlines trade.

Re: Manufacturers want to quit China for Vietnam, but find it impossible

#80

Post by phonon » Thu, Aug 22, 2019, 1:33 PM UTC

remotecool wrote: post #26

shshehe wrote: post #18

Earlier quoted context omitted.

You have no idea what vietnam is like. Someone capable of spewing such garbage with confidence has no credibility about anything

I do. I spend 3 months/year there. Cops are very corrupt and most people won’t even report traffic accidents. If you are a foreigner/non-vietnamese, many hospitals won’t even treat you. Abject poverty, aside from a couple of big cities. Some may like it because with a little money, you can get away with anything.

What areas do you recommend?