PRESS ARTICLES

Vietnam became a country more attractive and more competitive than China.

Chinese capitalists found at their door a country where everything is cheaper. How does the new subcontractor of the world's factory.

Mr. Li is a man in a hurry. "In less than an hour, I want to have the goods unloaded from the ship. "And to appoint a long barge anchored on the river Ka Long, natural border between the cities of Dongxing, China, and Mong Cai in northern Vietnam. His workers - mostly employed by the day - running in all directions. They shoot, focus and drive are heavy boxes of clothing and footwear. "Everything comes across ... Viet Nam, "said the businessman, born in Nanning, capital of Guangxi Province, China, three hours away. Opposite, "everything is cheaper," he says. Labor, land, taxation ... A "paradise" for the new capitalists of the Middle Kingdom.

Free Trade Agreement

"With rising wages, China does not produce as cheaply as before," says another local contractor. The introduction last year of the Agreement of Free Trade between China and ASEAN (Association of Southeast Asian Southeast) also blew Vietnam's exports to China (+ 49% over one year). Consequence: the tiger of Asia, still very dependent on imports from its neighbor - the trade deficit with China is valued at 8.7 billion euros in 2010 - turns into a sub-contractor of the "world's factory" .

So every day, hundreds of boats and trucks crossing the Ka Long produitsMade loaded block in Vietnam. Nothing here said that there were thirty-two years the Chinese army crossed the same river, trying - unsuccessfully to invade the Socialist Republic of Vietnam, then close to the USSR. "These are old stories, said Mr. Li Today, both countries are WTO members' In the streets of Dongxing, now boast large panels bilateral trade and announced the fi n of the construction, edge of the city, the largest cross-border market in ASEAN (51 hectares, 200 million spent). Sure, the second largest economy in the world will build on Vietnam (it is the eighth largest foreign investor) to manufacture all its factories in Shenzhen and elsewhere do not want to happen. "China wants to erase its image as low cost," says an economist Shanghai. Vietnam to inherit? For many years, "the little neighbor," as many Chinese call him, is known for its very low production costs, which include Nike won.

Installation of multinationals

Just go to Bac Ninh, 40 km north of Hanoi, to account for this surge in Vietnam. On what was a few years ago a vast expanse of paddy fields have set amount of multinationals - many accompanied by their local subcontractors. We came across Samsung (9,600 employees, the largest factory in the world of Korean), Canon (8500), but Foxconn (5600), leading manufacturer of electronic products. "Vietnam has become a very competitive country," says the group from its headquarters in Taiwan. For him, the reason is obvious: while workers' wages rose sharply on the Chinese side in production areas and will continue to rise, according to forecasts, the rate of 15% per annum until 2015, Vietnam became an option bis "interesting" (graph-cons).

China also began to develop a legal arsenal for its blue-collar workers (employment contract required, modification of the criminal law in the event of default ...), considered more binding. Eventually, many low-end industries (assembly of motorcycles, household appliances ...) until now dominated by China "will completely leave for Vietnam," according to the law firm Baker & McKenzie in Ho Chi Minh City.

The appetite of investors, who have long relied on China, is also due to other reasons, including tax. "The United States imposes a tax of 37% of candles made in China, against 5% of the candles Vietnamese, 6% on Chinese LED and no LED on the Vietnamese," says French Sebastien Breteau, CEO of AsiaInspection, quality control specialist in both countries.

Same quality

That is what attract Chinese companies. Neo-Neon LED Lighting International, for example, recommends that customers go through the factory of Vietnam, near Hanoi, where quality is the same but the export costs are 15% lower, or Hazan Group, large Wenzhou shoe manufacturer (in the east-central China), together with its production units located in the area of ​​Dong Nai, South Vietnam, it produces up to 15,000 pairs per day (80% revenues). Slowly but surely, the Chinese giant relocates in Vietnam, and to strengthen its economic footprint. A few months ago, the countries of central Vietnamese obtained the authorization of several hundreds of micro-investments (amounting to more than $ 3 million).

Many on-site, however, complain of a growing subjection to the powerful neighbor - the first importer in the country, major provider of industrial equipment, electronics, steel and petroleum products. "Our market is flooded with Chinese manufactured goods," was concerned earlier this year the quotidienVietnam News. Since then, Hanoi responded by requiring the reduction in import thousands of foreign products. Among them, wine and luxury products, which penalizes the French. More importantly, consumer products, for which Made in China is clearly in the sights.

The long road ahead of Chinese wages

Fini, "the Chinese Eldorado"? If the findings surprise OECD statistics, it is especially developments scheduled impresses: the new five-year plan to upgrade workers' wages by 15% per year until 2015! The plant world is not what it was. A worker in Guangdong is now paid on average $ 205 per month. Result: the coastal areas were gradually abandoned in favor of the less popular, where most of the lower salaries. Henan is the case ($ 114 per month) and Sichuan-Chongqing ($ 125 per month), most populous provinces of the country (250 million). Foxconn has announced its intention to move some of its production (300,000 jobs in the key) in Henan, which are also from most of its workers. Ditto for the production units of HP and Intel, installed at the moment by the river Yangtze.

Peter Tiessen.

http://www.worldcrunch.com/chinese-wages-rise-hunt-cheap-labor-lands-vietnam/3397

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Vietnam is a paradise for relocation

Feature - Samsung, Canon, Nike and now Chinese companies are taking advantage of this paradise ... Published April 15, 2013

From our special correspondent in Vietnam

20minutes.fr/economie

Please do not stop. In Ho Chi Min City, pedestrians should have the faint of heart to cross. Even if it has priority. Must jostle among the swarm of scooters and cars, like a school of fish that touch you without touching you. No way for drivers to give way. Here every second is gold.

The work primarily

Since economic liberalization in 1991, the Doi Moi (change to the new), the population, 60% within 30 years, enjoy the joys of mass consumption. And for that, she is willing to sacrifice. "The Vietnamese are big hard workers. 77% think that the work should go before the rest, "said Fabrice Carrasco responsible for engineering Kantar World panel. As a result, they work on average 50 hours per week. An argument for many multinationals that make Vietnam a paradise for relocation.

And Nokia, after leaving his German Bochum plant to install in Romania, decided in 2011 to close it. Directorate Bac Ninh Province in northern Vietnam. An investment of € 200 million where 10,000 employees work in the long term. Finnish is not alone. Samsung is the largest plant of world production. Canon or the Taiwanese Foxconn, which manufactures Apple products also employ nearly 10,000 people. Nike has even 200,000. In Ho Chi Minh City, Intel has put a billion dollars on the table to open a chip plant in 2010.

Cheap labor

"We have our fingers agile, intelligent and our labor is cheaper than in other Asian countries," boasts Vu Tien Loc, President of the Chamber of Commerce and Industry of Vietnam. The minimum monthly wage is less than 40 euros with a working time is close to 50 hours per week.

Result, even Chinese companies begin to outsource their neighbor. A phenomenon that has grown since 2010 with the signing of a free trade agreement with the countries of Southeast Asean members. Indeed, wages in the second largest economy of the world climb 15% per year due to the decline in the labor force. "Vietnam is now the prerequisite for the most costly in labor before going to China," decrypts Philippe Delalande, author of Vietnam, dragon power. This is the so-called one China policy.

Strategy of moving upmarket

But things could be changed. "To avoid being trapped in the trap of low wages, the authorities require more investment projects they are accompanied by an increase in range and refuse those seeking only to exploit low wages "such as textiles and footwear, says Philippe Delalande. Vu Tien Loc is nevertheless convinced that his country will remain cheaper than its neighbors. "Look at the investments that Koreans and Japanese are among us. Do not waste your time. This is advice that I give you, "he says at the French one hundred patrons attended last week at the France-Vietnam business forum.

Peugeot makes a comeback

Received 5 out of 5 by Peugeot which to circumvent import duties of 100% for imported vehicles, announced Monday a partnership with THACO, the first Vietnamese manufacturer for the assembly of the 408 (the equivalent of lying 308 ), already sold in China. Eventually, the French group is back in Vietnam should make the model on the spot, and also sell many other manufactured in France whose 2008. The evidence for the group to produce abroad is not always a bad sign for French employment.

For his part, to take advantage of the expansion of the healthcare market in Vietnam, Sanofi has put $ 75 million on the table to build a new factory in Ho Chi Min, operational by 2015. It will also serve as an export platform to the member countries of the ASEAN.

Mathieu Bruckmüller (special envoy to Vietnam)

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ECONOMIE & FINANCE

COMPETITION Mardi28 June 2011

Rising costs in China grows more and more plants to settle in Vietnam

BY PIERRE Tiessen Mong Cai (Vietnam)

Salaries soar in the second economy in the world. Samsung, Canon, Foxconn and others move their production sites

The road from Mong Cai (Vietnam Border) in Nanning, capital of Guangxi province in the far south of China, is always full. Amount of trucks traveling at breakneck speed on this "trench" of 150 kilometers redone a few years ago. They come loaded with lots of clothes, shoes, supplies low-end they sell in the region and into the neighboring Guangdong.

In Vietnam, "everything is cheaper, said a local Chinese. Here, our workers are becoming more and more expensive. " There, on the other side of the border, "it is still profitable," says he. To listen, China - now the second largest economy in the world - no longer the paradise of the past where the blue collar factory toiled against poverty wages. In Shenzhen, for example (where the strikes of workers broke out there just a year at the gates of foreign plants) "Things have improved," says Li Qiang in turn, representative of the American NGO China Labor Watch (CLW). In these companies, "85% of workers have been increased" over the past year. The impact of wage pressure is "sensitive" (141 dollars / month minimum, 21% on average in a year), says although he believes that "working conditions are often unacceptable" . Result: more and more contractors Chinese and international look to ASEAN countries - Vietnam, in particular where the minimum wage in major production areas does not exceed 85 dollars per month.

Just go to Bac Ninh, 40 km north of Hanoi, to account for this "push" Vietnamese. There, on what was a few years ago that large rice fields, have set amount of multinationals - many accompanied by their local subcontractors. We came across Samsung (9600 employees, the largest factory in the world of Korean manufacturer), Canon (8500 people) but also the Taiwanese Foxconn (5600 workers), leading manufacturer of electronic products and largest private employer in China (420,000 jobs). "Vietnam has become a very competitive country," says the team from the headquarters of the group communication, "and very dynamic." For 10 years, the industrial growth (+14% in 2010) experienced an average increase of 6 percentage points higher than GDP. Unable however to know exactly how many Chinese players who have recently relocated their production in or near Ho Chi Minh City to the south (the largest economic zone of the country). One thing is clear: "Both sides (China and Vietnam) began to open and facilitate investment," says a European expatriate who performs quality checks at the factory near Hanoi. In January 2011, China has invested several million dollars in two projects and is currently the eighth investor in Vietnam. "

Above all, the free trade agreement China-ASEAN, in effect since early 2010 has boosted Vietnamese exports to the Empire by 49% over the last twelve months, while the trade deficit with Beijing is close to 9 billion euros in 2010.

The first to take advantage of this boom are the Vietnamese SMEs. A Dongxing, a Chinese city situated right in front of Mong Cai, large panels welcome the agreement and announce the end of the building - on the edge of the city - the largest cross-border market in the ASEAN region (51 hectares, 200 million euros spent). Soon amount of exhibitors and traders sell and / or buy anything online that Vietnam produced at low cost.

In front, the Vietnamese side, the footprint of China is increasingly visible. The giant (public) of construction, the company built CSGEC Mong Cai major industrial complexes. Many intermediaries in Guangdong have also offices and especially the Chinese yuan will become a reference currency (while the Vietnamese dong has been devalued in February, the fourth in 15 months). Many on-site, however, complain of hardship growing Chinese dragon - the first importer in the country, major provider of industrial equipment, electronics, steel and petroleum products.

"Our market is flooded with Chinese manufactured goods," was concerned earlier this year the newspaper Vietnam News.

Hanoi now discourages 15,000 articles on imports, including wines and manufactured goods (machinery). On-site observers noted an increase in tariffs on some products. Finally, the Vietnamese government earlier this year launched a campaign to buy local.