Despite challenges posed by the COVID-19 pandemic, Vietnam remains an attractive location for manufacturers that seek relocation from China, and it is gaining advantages with the Regional Comprehensive Economic Partnership (RCEP) agreement taking effect.
The average labor cost in Vietnam is US$2.99 per hour, lower than US$6.5 per hour in China. The relatively low manufacturing costs in Vietnam make it appealing for foreign investment. The RCEP, a 15-country free trade agreement (FTA) that entered into force on January 1, 2022, is considered a boon for Vietnam. Vietnam’s GDP ranks the world’s 40th and the 4th among its ASEAN peers.
The country has beat many IT powers to become the world’s second in terms of manufacturing and cellphones exports. Meanwhile, it ranks 9th in exporting and outsourcing electronics products and 6th in computer games. These figures show that Vietnam is emerging as a strong ICT power.