Big Chess Game! Did Japan Become The Biggest Beneficiary Of Trade War?

The Sino US trade war is beginning to blow up. In order to suppress "made in China", the US imperialism moves constantly, and the development path of China's textile and garment industry is also deeply influenced by the world political pattern.

Japan also took the trouble to formally terminate the treatment of GSP in China on April 1st. At that time, the average tariff rate of China's goods exported to Japan will rise by about 3%, and some of its products will even exceed 10%.

It is very cloudy that Japan still retains the GSP treatment to Vietnam, Indonesia and other countries. The price competitiveness of these countries is enhanced, and China's textile and garment exports will face more intense competition.

Under the joint attack of the United States and Japan, the recent discussions on Vietnam have gradually heated up. The focus of attention is whether Vietnam will repeat China's economic miracle.

Will it become the biggest beneficiary of the trade war?

Will it become the next "world factory"?

Recently, the International Investment Research Institute of the Institute of world economics and politics of the Chinese Academy of Social Sciences went to Vietnam to visit Chinese modeling enterprises, logistics enterprises, Chinese funded financial institutions, China Chamber of Commerce and Chinese embassies and consulates, and also held talks with scholars from Vietnam's relevant think tanks, and conducted a survey on the situation of Chinese enterprises' direct investment in Vietnam.

According to official data released by Vietnam, its GDP reached about $238 billion 200 million in 2018, an increase of 7.08% over the same period last year, the highest level since 2008.

Exports exceeded GDP, set a new record with us $482 billion 200 million, and the trade balance reached US $7 billion 210 million.

01

What are the advantages of Vietnam?

1. Vietnam has signed more than a dozen free trade agreements (FTA) with the European Union, Japan and South Korea.

US import quota for textiles to Vietnam has increased year by year, which may facilitate tax relief and other customs clearance.

Vietnam is also a member of TPP and CPTPP.

2. Vietnam's labor cost is cheaper than China, and its cost performance is relatively high in labor-intensive industries.

The population is large and the age structure is very young.

3. Vietnam's trade unions are weak in terms of labour and negotiate easier with employers and governments in labour negotiations.

02

In those days, the evacuation route of electronic industry in Terry Gou's phase became popular again.

In early 1.2007, when Vietnam joined WTO, Terry Gou, chairman of Foxconn, personally inspected Vietnam's less than Shenzhen 1/3.

2. he found that the spare parts were shipped from Longhua, Shenzhen at night, and could arrive at North Vietnam on the second day.

Vietnam is far from the Chinese supply chain, and the time frame is not enough.

3. Foxconn bought more than 400 hectares of land in Vietnam as the next assembly and manufacturing base in Vietnam.

4., in the second year, the global financial tsunami occurred, and Foxconn Vietnam's factory plan had to stop.

5., after 12 years, the "trade war" has swept the world. The high tariffs of electronic products have made the Chinese electronics factory dare not slow down the move of the industrial line.

6. in recent months, Chinese enterprises have come to inquire about the situation in northern Vietnam.

Anxious to finish the production of the first rental plant, the early completion of the enclosure factory, and put into production.

03

What is the speed, scale and future sustainability of this wave?

1. up to now, there are three waves of investment in Vietnam by Chinese enterprises.

The first wave occurred roughly 10 years ago. At that time, the United States carried out an anti-dumping investigation and countervailing dual anti - Investigation on some Chinese exports.

The second wave occurred roughly three or four years ago, which was related to the ongoing TPP negotiations (such as the pfer of Nike and Adidas from China to Vietnam).

The third wave is at present, which is significantly related to the increasing trade frictions between China and the United States.

2. China's three wave of investment in Vietnam has typical trade barrier evasion characteristics.

Chinese enterprises have a strong order pfer nature to Vietnam's direct investment, and the main purpose is to avoid the trade barriers of developed countries to China.

3. the investment of Chinese enterprises in Vietnam is mainly concentrated in textile, clothing, footwear and agriculture industries.

China is the fifth largest source of foreign investment in Vietnam after South Korea, Japan, Singapore and China Taiwan.

From the perspective of industry distribution, the industrial layout of Korean and Japanese enterprises in Vietnam is relatively high; the investment of Chinese Taiwan in Vietnam is still dominated by OEM.

Chinese enterprises' direct investment in Vietnam is at least 5 years later than that of Korea and Japan, and quite a few enterprises are forced to move to Vietnam.

4. many foreign-funded enterprises in China are also considering shifting the manufacturing base from China to Vietnam.

04

Is it difficult or easy to go south?

1. the Vietnamese government, the media and scholars have strong psychological precautions against China.

The long-term border problems and the contradictions in the South China Sea do not want much domestic elements in China, and we hope to minimize the impact of China's economy on Vietnam.

The Vietnamese people are not too receptive to the "one belt and one way" initiative. They are also vigilant about loans from China.

The negative problems of China's speculation in Vietnam are very popular in the Vietnamese media.

China's state-owned enterprises are very interested in investment in port and mining industries, but it is hard to promote in Vietnam.

The Vietnamese are also worried that a large number of Chinese enterprises will take Vietnam as a "third party channel" to avoid the "trade war" between China and the US, which may cause Americans' aversion and policy adjustment.

Vietnamese people do not have strong anti China Chavin sentiment.

The most serious damage to the "5 / 13 incident" is Taiwan funded enterprises in China. The main reason is that the Vietnamese employees are not very suited to the management mode and grade culture of Taiwan funded enterprises.

2. investment and operation in Vietnam must be legal and compliance.

Improper means of operation often lead enterprises to lose their blood.

So far, the Vietnamese government still has more stringent supervision over FDI enterprises.

The Vietnamese government strictly restricts the number of foreign posts in foreign-funded enterprises, and deliberately sets aside cumbersome approval procedures for overseas employees' work visas.

All kinds of administrative examination and approval procedures involving foreign investment are also very complicated and need to be handled in Hanoi.

The laws and regulations in Vietnam are also changing greatly.

3. the new wave of Chinese enterprises going to Vietnam will face the pressure of expensive employment, high land price and strict environmental protection.

Vietnam's per capita wages rose faster.

Under the government's promotion, the average annual salary increase is between 6% and 7%.

The investment in enterprises increased significantly, and the price of industrial land in Vietnam increased rapidly.

Vietnam's demand for technology in relation to Vietnam is much stricter than expected.

Many foreign invested enterprises in Vietnam use the most advanced technology and equipment in the world.

Some industrial areas in Vietnam require a grade a emission standards, which are even higher than some industrial zones in China.

Under the background of the fragmentation of the global trading system and the intensification of trade protectionism in developed countries, Vietnam has the potential to become one of the largest beneficiaries of the "trade war" between China and the United States on a global scale.

Although Vietnam has a good investment attraction, it still needs to attach importance to potential political risks for Chinese enterprises.