Vietnam can not replace China in manufacturing

Vietnam, a frontier market in southeast Asia, is often cited as one of the biggest winners in the u.s.-china trade dispute. But some analysts point to bottlenecks that could limit Vietnam’s ability to absorb additional trade flows.

One factor is manufacturing output. The size of China’s manufacturing sector and economy allows companies to operate more efficiently. Vietnam is seen by many as one of the best places to replace China, but while it still accounts for a small share of global manufacturing output, it has hit an economic bottleneck.

Another important constraint on Vietnam, some analysts said, was a lack of human capital, the report said. This refers to the economic value of the workforce, which includes factors such as the worker’s level of education, skills and health.

Vietnam cannot replace China in manufacturing

The report says Vietnam has a young and growing workforce-people aged 15 and older who are employed or not but are looking for work. But Vietnam’s workforce is much smaller than China’s.

Overall, Vietnam’s economy is much smaller than that of China, the world’s second-largest, the report said. That in itself has limited the southeast Asian country’s ability to replicate the great success of Chinese manufacturing.


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