Karim Raslan

Ceritalah | China’s loss in Trump’s trade war is Asean’s gain. Look at Vietnam

The country is setting an example to the rest of Southeast Asia when it comes to attracting industry

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The Vietnamese have endured more than thirty years of war, but after Doi Moi they have also witnessed dramatic growth.

Karim Raslan

Published: 6:00pm, 14 Sep 2018Updated: 7:10pm, 6 Nov 2018

President Donald Trump is a game-changer and in so many ways. While Southeast Asia rarely features on his agenda, the Trump-initiated “trade war” could well end up resetting global manufacturing and the all-important supply chains as exporters seek to lessen their exposure to China.

For the three giants of Asean (Association of Southeast Asian Nations) with populations of over 90 million – Indonesia, the Philippines and Vietnam – this could be a major opportunity. Essentially, each of the three is vying to attract industrial investment and the attendant employment. To date, Vietnam has been the most successful.

Indeed, Samsung, the world’s largest smartphone manufacturer, has invested over US$17 billion in Vietnam, contributing close to a quarter of Vietnam’s total exports of US$214 billion in 2017 alone.

Its two manufacturing plants – Bac Ninh and Thai Nguyen, located outside the capital of Hanoi – look like sprawling mini-cities as they spread across the Red River plain. And the facilities are huge – employing more than 149 000 people.

So, as the prospect of a major wave of industrial relocations from an increasingly expensive China becomes a reality, which of the three countries stands to benefit the most?

Sadly, the Philippines, with its clapped-out infrastructure, expensive energy and notorious bureaucracy, remains the outlier.

The Philippines has lagged behind due to clapped-out infrastructure and bureaucracy. Photo: Handout

Vietnam leads the pack. For example, in 2017 alone, Vietnam attracted US$35.88 billion in foreign direct investment whilst Indonesia, with nearly three times the population, trailed behind attracting only US$32.34 billion.