Manufacturers want to quit China, but neither Vietnam nor India match up

India has the manpower, but skill levels fall short and government rules are relatively restrictive

Niharika Mandhana | The Wall Street Journal Ho Chi Minh City
Manufacturers want to quit China, but neither Vietnam nor India match up

Few companies are planning to leave China altogether, but those that heavily clustered production in the country are urgently looking to diversify

With the US and China tangled in a nasty trade fight, this should be Vietnam’s time to shine. Instead, it is becoming increasingly clear that it will be years, if ever, before this Southeast Asian nation and other aspiring manufacturing destinations are ready to replace China as the world’s factory floor.
The specialised supply chains that made China a production powerhouse for smartphones and aluminum ladders and vacuum cleaners and dining tables are nowhere near as developed in Vietnam. Factories with US-focused safety certifications and capital-intensive machinery aren’t as easy to find.
And Vietnam, with less than one-tenth China’s population, is already running into labor shortages as global manufacturers rush to set up shop here to avoid US tariffs.

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First Published: Aug 23 2019 | 9:08 AM IST

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