Made in China

Published on Author concklint17

“Made in China” was a slogan of production outsourcing as my generation was growing up.  This could soon be a saying of the past.  Many articles are discussing the rise of production in countries like Vietnam, that can now produce consumer goods at considerably lower prices than China.

The major causes of these changes relate to the growing middle class in China, rising minimum wage, and the desire for improved working conditions throughout the nation.  Even in 2010, Vietnam produced a higher percentage of Nike footwear than China did.  Next time someone references “that Nike sweatshop in China” just know there are many more just like it throughout Vietnam.  This country, as well as Malaysia are only fit to grow even more as analysts guess that trade tariffs will be diminished between the countries and large Western nations in the coming months.

“What took 30 years in China is taking 10 years in Vietnam to happen,” said Mr. Smigelski. That is why “more and more companies are making bets on Vietnam.”  With this being said, don’t be surprised if the tag on your shirt soon says….


7 Responses to Made in China

  1. Interesting thoughts. I wonder how desirable these factories are for China. Will China possibly make moves to get back some of this business?

  2. Though Vietnam may currently see a lot of success siphoning off cheap production work that China recently dominated, are those increased levels of production sustainable for a country that has less than 7% of China’s population and far less land to work with? All these Southeast Asian countries combined can’t have the sort of astounding production ceiling China has, so where does mass production of this sort jump to next?

    • Vietnam has a lot of land relative to population – they and Thailand are exporters of rice. Yes, the surface area is small, but so is the pop!

      Add up the populations and ASEAN is not so small – Indonesia has 250+ million, the Philippines 100+ million, the regional as a whole 625 million. Now they’re developed but Japan and Korea and Taiwan add another 200 million.

  3. Could China shift away from the industry sector and try to enter the service sector (i.e. like the stereotypical Indian call centers)? Does China care that it’s losing industry to Vietnam? Like Cory said, it’s a tiny country compared to China. That would be like us worrying about Denmark stealing our grain production dominance.

  4. This growth in Vietnam is not surprising, as the Chinese government cites its intentions to develop China as a consumption based growth economy.

  5. Do you have any idea if Chinese manufacturing firms have begun to outsource their labor to Vietnam as of now? I would imagine this is unlikely seeing as China has an extremely large supply of cheap labor within their own borders, however I would like to hear your take on it.

    • Yes – though in the form of moving factories there, while leaving the HQ back in China. It’s similar to Apple, an American company [OK, for tax purposes not] that outsourced mfg long ago.