Vietnam boasts high potential to become new global production hub: expert

An automobile production line (Source: VNA)

Vietnam has high potential to become a new production hub of the world in the context of the current transition of the supply chain, said Dr. Ho Quoc Tuan, a senior lecturer at Bristol University in the UK.

Speaking to Vietnam News Agency (VNA) correspondents in the UK, Dr. Tuan said that the COVID-19 pandemic and US-China trade tension are major factors prompting the shift in the global supply chain, mostly from China to other countries in the region.

He said the urgent need to persify the global supply chain has created good chances for Vietnam to become one of the new production hubs of the world.

Vietnam is one of the countries that are most mentioned for the capacity of joining the global supply chain. Statistics showed that many big firms, including top US companies such as Intel and Apple, have moved their production to Vietnam. The country has also been listed as a competitor of China and India in these countries’ reports thanks to its advantages in low-cost labourers and attractive incentives for foreign investors.

However, Dr. Tuan underlined that Vietnam should take timely moves to optimise its potential and opportunities.

He recommended that the country should improve the quality of human resources, infrastructure including internet and transport, and speeding up economic digital transformation and technology application.

Tuan asserted that in order to overcome competitors in the region, Vietnam should accelerate infrastructure development and digital economy, while designing suitable policies to encourage investment in human resources development.

At the same time, Vietnam need a comprehensive industrial development strategy, ensuring that not only foreign businesses but also domestic firms access preferential policies, enabling both economic sectors can invest in production at low cost, he said.

The strategy should focus on a number of spearhead industries, while boosting agriculture development.

The expert warn that India is also emerging as a good choice to replace China, with a high possibility of becoming a growth pole in South Asia. If Vietnam fails to become a growth pole in the region, it will miss the chance to other countries near India, he stressed.

He emphasised that it is the time for Vietnam to quickly reform and make a breakthrough in growth by launching a comprehensive industrial strategy with specific, ambitious and feasible targets./.