Content summary:
. Our international market share in traditional consumer goods has declined;
. Vietnam's international market share in traditional consumer goods has increased rapidly;
, Malaysia , Bangladesh 's international market share in traditional consumer goods has also increased;
. Vietnam's pace in consumer electronics and semiconductor manufacturing has surpassed traditional consumer goods;
. Overseas orders of Chinese export companies are decreasing significantly;
. What should not be underestimated in the restructuring of global supply chains is Vietnam!
In the past decade, China's industrial structure has been undergoing drastic adjustments and upgrades. We are focusing on developing semiconductor and new energy industries, while traditional manufacturing industries that have brought us a large number of job opportunities and once promoted the rapid development of China's economy are constantly losing.
From the earliest clothing manufacturing industry, shoe manufacturing industry, luggage industry, furniture, to the electronic consumer goods such as mobile phones that have begun to flow out in the past two years, China is constantly conveying manufacturing and export market share in key areas to its neighbors in Asia. On the one hand, this has caused us to lose some of our labor jobs, which has driven up unemployment rates, and on the other hand, it has indirectly helped strengthen our competitors and weakened our long-term dominance in global trade.
. Our international market share in traditional consumer goods has declined
According to data from transportation brokerage MDS Transmodal, our international market share in key consumer categories such as clothing and accessories, footwear, furniture and travel supplies has declined, and the export share from minerals to office technology has also declined.
Compared with 6 years ago, our share of global consumer goods exports, clothing and accessories has dropped by 4 percentage points, aggravated by 11 percentage points, shoes have dropped by 7 percentage points, and travel goods and handbags (leather bags) have decreased by 13 percentage points. Teodoro, senior consultant at
MDS Transmodal, said: "China has changed a lot in recent years. From labor costs, industrial policies, domestic demand, to epidemic prevention policies, these comprehensive factors have caused manufacturers to look for alternatives to the current 'world factory'."
2. Vietnam's international market share in traditional consumer goods has rapidly increased
In fact, we have studied the commodity group with significant changes in China's customs exports and can observe that we have been losing some of the market share of traditional manufacturing industries. Among the manufacturing countries that undertake our transfer, Vietnam is particularly prominent and is becoming more and more important in the international market because it is close to us, has lower labor costs, and implements a bolder reform and opening-up policy than us.
Shipping Company Maersk and Vietnam Maritime Company announced in July 2022 that it will establish a new transshipment container terminal project near Ho Chi Minh City . Once completed, it will become Vietnam's largest transshipment terminal. Maersk and Da Cylinders are investing in expanding their own facilities in the region.
US shipping companies are looking for new markets, but investing in and expanding in Vietnam. This represents the perception of future demand by U.S. capital and creates markets through these investments.
In the years before the epidemic, Vietnam's competition with us in traditional manufacturing has continued to intensify. Since 2014, Vietnam has taken the largest share of manufacturing trade from us, with long-distance trade growing by nearly 360%. Vietnam actually started investing in its maritime and manufacturing industries since 2014.
Vietnam's achievements in developing the manufacturing industry are obvious. Compared with 2016, Vietnam's share of the global consumer goods export market increased by 9 percentage points to 17%; footwear increased by 4 percentage points to 16%; tourism goods and handbags increased by 4 percentage points to 10%.
. Malaysia and Bangladesh have also increased their international market share in traditional consumer goods
In addition to Vietnam, Malaysia and Bangladesh have participated in the acceptance of my country's outflow manufacturing industry in traditional manufacturing industries such as clothing and footwear.
According to a research report by MDS Transmodal, Malaysia and Bangladesh have accepted a large number of clothing manufacturing and shoemaking industries transferred from China. Taiwan's metal manufacturing industry has risen slightly.
SEKO Logistics Senior Vice President of Products at Asia Pacific said that since the U.S. imposed trade tariffs on China in 2018, it has been looking for alternative procurement locations outside of China, initially limited to fashion and footwear. During the epidemic, the compound impact of supply chain disruptions in Shenzhen, Ningbo and other places has led to rapid increase in hedging its procurement areas, especially with customers in countries such as Vietnam.
SEKO There has been an increase in the flow of raw materials in Asia, followed by the increase in exports of traditional manufacturing products from Vietnam and other Southeast Asian countries.
. Vietnam's pace in consumer electronics and semiconductor manufacturing has surpassed traditional consumer products
Vietnam's ambition in manufacturing is not to stay in traditional manufacturing. In recent years, driven by the demonstration of , Samsung , Vietnam has developed even more amazing in the consumer electronics and even semiconductor industries.
Currently, The two most important suppliers of Apple , Foxconn and Luxshare Precision are negotiating the first production of Apple Watch and Macbook in Vietnam. Meanwhile, Taiwan-based Foxconn announced that in order to support its expansion in Vietnam, its company plans to invest US$300 million to recruit 30,000 people to build a new factory in the northern province of Beijiang , about 50 kilometers away from Hanoi. Foxconn has invested in Vietnam for many years, with a total investment of more than 1 million yuan.
In 2021, Intel invested US$475 million in Ho Chi Minh City's largest chip assembly and testing base. American chip design software company Synopsys Technology (Synopsys) also announced that its company will transfer its investment and engineer training business to Vietnam. Google also announced that Pixel smartphones will be produced in Vietnam starting from 2023.
Samsung is no longer satisfied with producing consumer electronics in Vietnam. After investing in the largest Industrial 4.0 Technology Research Center in Southeast Asia in Hanoi in 2020, it announced in August last year that it will invest US$3.3 billion to establish a semiconductor component production line in Vietnam by July 2023. Samsung's total investment in Vietnam has reached nearly US$20 billion in the past 24 years, one-third of which is new investments in the past 5 years.
In 2021, my country's export of consumer electronic products such as mobile phones, computers, smart TVs, etc. was about US$280 billion. Vietnam's export of consumer electronic products has reached US$110 billion, close to 40% of our consumer electronic exports, accounting for nearly 33% of Vietnam's total exports, doubled compared with 2019 before the epidemic. It can be seen that Vietnam's manufacturing industry has been upgraded very quickly. In about five years, Vietnam's exports in semiconductors and consumer electronics are estimated to exceed US$500 billion, which is close to our exports in semiconductors and consumer electronics.
. Overseas orders of Chinese export companies are decreasing significantly
Freight tracking company Project44 data shows that since the beginning of early 2022, the total capacity of ships leaving Chinese ports has been declining.
According to Josh Brazil, the vice president of supply chain insights at Project44, monthly ship capacity by 2021 was about 11.2 million TEU, and ship capacity leaving Chinese ports fell to 8.6 million TEU in September, meaning ship capacity leaving Chinese ports fell by 23.2%.
According to sea shipping bookings tracked by FreightWaves SONAR, the number of containers ordered by shippers through sea shipping is also continuing to decline.
FreightWaves SONAR's scheduled shipping order data shows that orders for goods shipped from China to the United States in November 2022 are expected to fall by 40% to 50%.
. Vietnam is particularly important in the restructuring of global supply chains.
According to a new report released by New York University Stern School of Business in early October, forecasts of global trade slowdowns have not occurred as supply chains are repositioned through the reflow of manufacturing operations.
Although faced with adverse factors such as the COVID-19 pandemic, the global economic slowdown and the Ukrainian war, trade growth rate in 2022 and 2023 is expected to be slightly higher than in the previous decade. "Globalization has not led to regionalization, we have seen some supply chains in emerging markets be used cleverly. Vietnam is the obvious winner." The report noted that as some manufacturing industries leave the mainland for various reasons and move their production lines to Southeast Asia, outstanding Vietnam strengthens its position in global trade.
NYU Stern DHL Senior Research Scholar and Director of Globalization Initiative said: "This combination is attractive to trading partners, which means the country has a scale to keep up with the growth rate."
Ultra Steve also believes that emerging markets are importing more raw materials and adopting more technologies to attract more transactions and trade in manufacturing. And India and Philippines are other new trade growth points. The transfer of manufacturing industries in
This kind of transfer will help these countries to develop innovation and technology, and of course it will also help improve their status as international trade.
A few years ago, it might be difficult for us to imagine whether the manufacturing transfer in emerging markets would occur under the concept of "China +1, +2, +3". We even firmly believe that Vietnam and other Southeast Asia will not be able to invest in these places except for receiving some low-end manufacturing, consumer electronics manufacturing, and especially the top semiconductor manufacturing industries that we do not need. But when the times change, looking forward to the future, what should happen or not will definitely happen.
From January to August 2022, Vietnam attracted foreign investment (FDI) US$15.4 billion, and increased by 16.2% year-on-year. The total amount of foreign investment exceeded US$430 billion, and the total amount of foreign investment exceeded 35,500. Vietnam's commodity exports in 2021 were US$336.25 billion, accounting for 92.7% of its GDP.
What should not be underestimated is Vietnam!
[Author: Xu Sanlang]
