Vietnam Suffers From Financial Crisis, Taiwan Investment Eyes Turn To Central Again

The whole country's geographical location, coastal and labor costs are low. Why is it that a new star who has been replaced by the world's Pearl River Delta has become a world factory?

Overheating is definitely the biggest incentive.

In May, Vietnam's inflation reached 25% (excluding grain, oil and electricity prices); the trade gap in the first 5 months was 14 billion 400 million US dollars, up four times compared with the same period last year; and the stock market has accumulated 56% over the past year, which has hit the world's biggest drop. The Vietnamese shield has been dropping again and again.

This is not a reminiscent of the financial turmoil that began 10 years ago when the Thai baht began to depreciate.

History is coming from yesterday.

Today's Vietnam financial crisis is the result of the economic boom in the past few years.

Over the past few years, Vietnam has vigorously promoted economic development and implemented low interest rates, attracting a large number of overseas funds into the stock market and real estate. The good scene has increased GDP by about 7.5% a year.

The tiger of South Asia is coming out, and it also has great attraction to world capital.

In recent years, a large number of foreign investors have poured into Vietnam, and multinational giants such as Nike, Microsoft, Mercedes Benz, Intel, Foxconn and so on have flocked to Vietnam to invest in factories. Last year, foreign invested enterprises applied for 20 billion US dollars in Vietnam, which is 1/3 higher than that in neighboring Thailand.

At the beginning of this year, China's "two taxes combination", the implementation of the new labor law, the huge increase in raw material costs, the adjustment of the export tax rebate policy and the tight financing difficulties made many Hong Kong and Taiwan enterprises in the Pearl River Delta seem to be interested.

Part of the Pearl River Delta Electronics, clothing and footwear and other labor-intensive industries to Vietnam.

However, in the short period of six months, the enterprises pferred to Vietnam in the Pearl River Delta have yet to gain a firm foothold.

This is not only related to the untimely supply of Vietnam's macro policies, but also to the lack of industrial foundation.

A country with abundant reserves of crude oil, because of its lack of industrial foundation, exports crude oil one hand and relies heavily on imported refined oil on the other hand, so that the benefits of high oil prices can not only fail to enjoy, but rather pay for high oil prices, resulting in an increasingly large trade deficit.

According to the financial times, Vietnam's American Chamber of Commerce called on the Vietnamese government to act quickly to restore macroeconomic stability at the annual meeting of the Vietnamese government and foreign business in June 2nd.

That is to say, the choice of setting up factory production in a certain area depends on not only the low cost of local land and labor, but also the fact that the price of a female worker in some parts of Vietnam is only 1/6 of Guangdong's labor force, and equally important is whether the local economic situation is stable and whether the industrial and related infrastructures are perfect.

Many factors such as high inflation have brought Vietnam to the edge of the economic crisis. Enterprises pferred from eastern China to Vietnam are facing huge operational risks.

Some Hong Kong and Taiwan enterprises have to lay off workers and reduce business.

"These enterprises are less likely to divest completely."

Analysts believe that, because of the rapid development stage of Vietnam in the first two years, many eastern China enterprises have stepped in and bought factories and equipment.

Real estate prices in Hu Zhiming have fallen by 50%, while Hanoi is slightly better, down 20%.

It is difficult for enterprises to retreat under such circumstances.

However, the financial crisis in Vietnam still has an important impact on the eastern coastal industrial pfer.

Guotai Junan analyst Zhang Xiuqi pointed out that at present, Vietnam's stock market is insufficient to spread to China's stock market, and may even become a factor stimulating China's stock market. Hot money keeps flowing out from Vietnam to find new investment directions. China's stable development and effective macroeconomic regulation and control may become another investment point for Vietnam to withdraw funds.

In particular, the eastern industrial capital, including Taiwan capital, has the same cultural identity with the mainland, which can greatly reduce the investment cost.

In the past, Taiwanese capital pferred to Vietnam was mainly inland in the central part of the country, and the pportation cost of export products was large, and Vietnam had advantages both in straight line distance and in shipping cost.

But compared to Vietnam, the central part of China has obvious cost advantages in terms of industrial layout, pportation infrastructure, preferential policies, labor, land and hydropower prices. Only the export enterprises are far away from the harbour, but this can improve customs clearance procedures and improve the efficiency of import and export.

Wuhan is the first place of the revolution of 1911, and has a historical origin with the top of the Kuomintang.

Taiwan funded industries such as food processing industry, chemical industry, electronics and other industries all have industrial bases in Hubei.

Taiwanese investment in Hubei ranks fifth among the provinces and municipalities throughout the country.

The "rainy weather" has created conditions for Hubei to build a rainbow of economic and trade relations.

For Hubei, the main force to attract Taiwanese investment lies in the business environment, that is, to offset the pportation costs caused by geographical location through low paction costs, and profit margins after the rush.

At the same time, we should actively go out to attract investment and let Taiwanese businessmen feel the warmth of "one family".

In this way, Hubei has greater attraction for Taiwan capital.