On  2018-07-12 18:15:34

US, China trade war is helping Vietnam’s economy

The looming US-China trade war has boosted foreign investment in Vietnam, accelerating an already strong trend of foreign firms veering away from China and its rising costs and eyeing ventures in Southeast Asia.

Despite economists’ warnings that the escalating trade tensions between the world’s two largest economies could indirectly hurt growth in Southeast Asia, the region is still seen as a destination for foreign companies shifting production away from China, where rising wages have increased manufacturing costs.

Foreign companies from Japan, South Korea, Hong Kong and mainland China are flocking to Vietnam, largely to diversify their investments. That is especially true in manufactured goods, where Vietnam’s cheaper costs make it more desirable than China.

Vietnam’s economy has been growing at a record pace, driven largely by inflows of foreign direct investment. Growth surged 7.08 per cent in the first half of 2018, the biggest increase since 2011.

Read more at South China Morning Post.

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