"China Plus One Strategy" refers to the United States, Europe, Japan and other countries that will concentrate on investing in China since the 1990s, "transfer various industries to other emerging developing economies such as Vietnam and India" to avoid the risks brought by excessive concentration of supply chains.
Especially after the global pandemic, the US trade protectionism thoughts have increased and not decreased, further promoting the idea of decentralizing supply chains. This has led to the rapid development of trade between the United States, Europe and Vietnam and India, and stimulated their manufacturing process.
Nansheng believes that the rapid development of manufacturing in emerging developing economies including Vietnam and India "does bring new pressure to my country's commodity exports." However, it is not advisable to over-examination of the threat of Vietnam's rise, and we need to look at the advantages and disadvantages behind the vigorous development rationally.
First of all, the manufacturing industry's position in Vietnam's economic structure is not as high as netizens imagined. Taking the first three quarters of this year as an example: the nominal GDP completed by the whole Vietnamese society increased to 6839.048 trillion Vietnamese Dong (as shown in the figure above), about US$295.27 billion, actually up 8.83% year-on-year.
Among them, the GDP created by the manufacturing industry is 1709.243 trillion Vietnamese dong, which is only equivalent to 24.99% of Vietnam's total GDP. In comparison, my country's manufacturing industry generated GDP in the first half of this year was 16231.5 billion yuan (as shown below), which is about 28.85% of my country's total GDP.
For a country that implements an export-oriented development model, manufacturing accounts for only one-fifth of the national economy, which is not a satisfactory data. More importantly, the contribution of manufacturing to Vietnam's economic development has begun to decline.
Take the third quarter of this year as an example. Vietnam's economy actually rose 13.67% year-on-year. Among them, the manufacturing industry grew by 13.02%, while the service industry grew by as high as 18.86%, becoming the core force driving the development of the national economy, and this "core position" has appeared many times.
At present, Vietnam's economic foundation is still relatively weak, and its industrial structure has been at the "bottom of the global supply chain" for a long time. It is a golden period for all efforts to promote the development and upgrading of manufacturing, and a critical period for manufacturing to lead among various industries - at least this has been the case in our country before.
However, Vietnam has transferred the core force that promotes economic development to the service industry prematurely. On the one hand, this shows that Vietnam's manufacturing industry upgrade trend is lower than expected; on the other hand, it shows that Vietnamese companies may not make substantial breakthroughs in core technologies during the investment attraction process.
Secondly, Vietnam's manufacturing industry relies too much on external market supply, taking commodity trade in the first three quarters of this year as an example: Vietnam's total import and export volume reached US$558.52 billion. Among them, the amount of exported goods was US$282.52 billion and the amount of imported goods reached US$276 billion. Among the imported products of
, "intermediate products and production raw materials" account for as high as 93.45%, and they are highly dependent on my country's supply. To a certain extent, the rise of Vietnam's manufacturing industry is a spillover in the downstream link of my country's manufacturing industry, which indirectly drives the development of China's upstream manufacturing industry, not a transfer of the entire supply chain.
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Third, the product added value under the OEM model is low, and the contribution rate to the economy is not high. Taking the foreign trade data in the previous third quarter as an example, although the total import and export volume reached US$558.52 billion, about 1.9 times Vietnam's GDP (US$295.27 billion), its direct contribution was only US$6.52 billion.
Note: Vietnam's total import and export volume in the first three quarters exceeded GDP, which is not a data error. What is included in GDP is " net export , not the total import and export volume". The total amount of import and export commodities in Vietnam, Singapore, , Netherlands, and other countries far exceeds GDP, which is a normal phenomenon.
Compared with the total foreign trade amount of US$558.52 billion and the export amount of US$282.52 billion, Vietnam's trade surplus is only US$6.52 billion, which indirectly shows that Vietnam's manufacturing industry is too dependent on incoming materials processing, and the product added value under the OEM model is low, so it's just a hard work fee. This article is written by Nan Sheng. Please do not reprint or plagiarize without authorization!
