China-Vietnam Business Update: May 24

Posted by Reading Time: 4 minutes

May 24 – Welcome to our biweekly China-Vietnam roundup in which we examine the latest bilateral news and commentary affecting foreign investment in the two countries.

China vs. Vietnam as the Future Workshop of the World
As a “China alternative” in overall production efficiency and quality, there is no doubt that Vietnam is up-and-coming, but industry and market development play a key role in the decision to move to Vietnam. For industries such as clothing and toy manufacturing – for which low-cost production is a chief concern – the labor market would be more responsive to any wage rate increases, thus requiring cutting down on factor inputs such as land and labor. For large multinationals it may make sense to set up production bases in Vietnam to complement expansion into the Vietnamese market.

Developing Your Business from China to India and Vietnam
Our new, complimentary 25-page PDF report detailing cost analysis, labor and factory overheads comparisons between Dongguan, Chennai and Ho Chi Minh City, as well as an overview of other emerging Asian markets such as Cambodia and Laos. It includes full factory cost analysis, descriptions of the legal establishment differences and options, the tax implications in these markets, as well as business and cultural differences. This is a must read for all executives interested in expanding into Asia.

Common HR Issues Facing FIEs in Vietnam
Even though they are usually better off than local Vietnamese companies, it seems that many foreign invested enterprises (FIEs) established in the country encounter hardships to follow the general evolution in terms of human resource (HR) management. Although one of the major advantages for foreign companies to invest in Vietnam remains the low cost of the workforce, the situation is changing for skilled labor, especially for the light and heavy industrial sectors. On average, salaries are rising, working-conditions are getting better, and policies are becoming more precise in Vietnam, but many FIEs are dragging behind.

Ho Chi Minh City Committed to Improving Investment Environment
Nguyen Trung Tin, the Vice Chairman of the Municipal People’s Committee of Ho Chi Minh City, has pledged to create more favorable conditions for investors to develop their business in Vietnam’s biggest city.

China-Vietnam Nansha Row: ‘Islands Are Indisputably Chinese’
More tensions concerning the Nansha Islands and the potential for conflict in the South China Sea have flared up after Vietnam held elections for “National Assembly Deputies” and “People’s Council Representatives” on the Nansha Islands, also known as the Spratly Islands. China has condemned the developments and stated they “constituted an encroachment upon China’s territorial sovereignty.”

Vietnam’s New Era: Value-added Projects and Sustainable Development
Over the past few years Vietnam has been experiencing gradual changes that definitely influence its socio-economic development strategy and this is expected to influence its policies for foreign invested enterprises (FIEs) in the near future.

East Asian Companies Keen on Vietnam as a China Alternative
More and more foreign investors, especially out of the textile and clothing industry, are looking to invest in Vietnam due to the increasing production costs in China. Two weeks ago, a joint venture between Pacific Vietnam Textile Ltd and Crystal Corporation was authorized by the Hai Duong provincial People’s Committee.

Dezan Shira & Associates maintain offices in Hanoi and Ho Chi Minh City and can advise foreign investors on establishing operations in the country. The firm also provides due diligence, tax and accounting advice. Please email, visit the practice at, or download the firm’s brochure here.

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