Pearl River Delta Enterprises Postpone Moving To Vietnam

Due to low production costs, many labour intensive industries in the Pearl River Delta once considered Vietnam as an ideal place for industrial pfer, but this trend has been suspended since the second half of last year.

A number of enterprises in Guangzhou, who had tried to relocate Vietnam, told the times that wage increases in Vietnam did not keep up with the speed of price rise, resulting in a wave of strikes and a fluctuating business environment.

Li Youhuan, a professor of economics at the Guangdong Academy of Social Sciences, believes that the financial crisis in Vietnam may evolve into an economic crisis, which has a great impact on the social economy and people's lives. The operation of various economic activities has become very difficult. The competition system in the bank is in trouble and the financial service ability is missing. These are the main reasons for the slowing down of the Pearl River Delta.

Nearly half of all the enterprises in the country are Cantonese enterprises.

The acceleration of RMB appreciation has brought difficulties to the operation of enterprises. The change of labor environment has increased production costs. In the past few years, the trend of PRD enterprises moving production to Vietnam was once seen.

Many textile enterprises in China have entered Vietnam in recent years.

According to a survey, more than 200 Chinese textile enterprises have set up factories in Vietnam.

Lingfang, deputy general manager of Guangdong textiles import and export Limited by Share Ltd, admitted that the Vietnamese shield had been devalued sharply, and the plant built in Vietnam was facing the risk of a substantial depreciation of assets.

The most safe way now is to distribute production orders to Vietnam only for "feed processing", and equipment and raw materials are not purchased locally.

Li Youhuan once participated in a nationwide research and investigation, and went to Vietnam and other places to investigate.

He told reporters that at that time, the data showed that as of the second half of 2005, more than 290 enterprises in China were relocated to Vietnam, of which 46% were Guangdong enterprises.

Last year, enterprises in the Pearl River Delta were postponed.

"The relocation of Guangdong enterprises to Vietnam has a special feature. It is not the entire industry chain moving past, but only moving part of the production links, and the headquarters remain in China.

At that time, Chinese enterprises moved to Vietnam and India were just an attempt. If Vietnam did not have economic crisis, it could be expected that more Vietnamese enterprises would be pferred to Vietnam.

Unfortunately, the Vietnamese government has also opened the door to overseas hot money while introducing foreign enterprises.

Li Youhuan said.

Li Youhuan survey found that, since the end of last year, the PRD enterprises can not move, Vietnam's inflation is serious, real estate and stock market soar, resulting in rising production costs.

Not only Vietnam, but also this year, India has seen a similar situation with Vietnam's inflation in the second half of last year.

He believes that the financial crisis will evolve into an economic crisis, which will have a great impact on the social economy and people's lives, and businesses in all walks of life will be hard to do.

Since the beginning of this year, Vietnam's stock market and real estate have both plummeted.

Is this situation an opportunity for Guangdong enterprises to move to Vietnam?

Li Youhuan believes that there are two important factors in industrial pfer, one is production cost, the other is local service capacity, including government and financial system.

If a country falls into an economic crisis, its economic operation will be very difficult. The banking competition system will be caught in a predicament and the financial services capability can not keep up with it, which is not conducive to business operation.

"After the Asian financial crisis in 1997, the Asian governments' policies, service capabilities and confidence in Thailand and other Asian countries have been rebuilt, and this is the best time to invest, but Vietnam's timing is unpredictable."

Li Youhuan said.

China is still the best place to invest in the world.

Li Youhuan believes that China's investment environment is the most ideal among all the countries in the world.

"How deep and when the US subprime crisis is over, it is still unpredictable. Europe has been greatly affected by the subprime crisis.

Many Asian countries, such as Vietnam, India and other countries, may have been trapped in the economic predicament.

He said that China is still the best place to invest, both in terms of production costs and political and economic stability.

He said that in a sense, the Vietnam financial crisis will make many plans to pfer the production links to enterprises in Southeast Asian countries to slow down or take a wait-and-see attitude, and urge them to make a decision to move to backward areas in China.

The head of the Hong Kong capital Huajian group also believes that China's reform and opening up policy has created a stable investment and business environment for 30 years.

Despite the acceleration of the appreciation of the renminbi and the rise in labor costs, and other factors.

However, the social environment of Southeast Asian countries is not stable, and China's stable business environment and good industrial support attract enterprises to stay in China.