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NNA survey: Manufacturers in Vietnam benefit from U.S.-China trade row

03, Jul. 2019

HO CHI MINH CITY, NNA - Manufacturers operating in Vietnam are benefiting from prolonged U.S.-China trade disputes, which have led to plant relocations and expansions across Asia, according to an NNA joint survey with a local industry body.

The multiple-answer survey of 566 firms in Vietnam showed that 31 percent of respondents had expanded output, while 31 percent anticipated rising sales in the years ahead.

The survey by NNA and the Vietnam Chamber of Commerce and Industry from April to May drew responses from 200 local firms, 81 from South Korea, 66 from Japan, 35 from Europe, 22 from China and 14 from the United States as well as from other countries and regions.

By industry, 26 percent of respondents were textile firms, 17 percent were in the food and beverage sectors, and 7 percent were footwear makers.

Since the outbreak of the trade conflict in the spring of last year, 24 percent of the 566 respondents said they had witnessed a rise in sales “somewhat” or “greatly,” while two-thirds said sales had remained unchanged.

As for impacts on their supply chains triggered by the trade row, 15 percent said they were considering stepping up production in Vietnam and other countries.

Among Japanese firms operating in Vietnam, 35 percent said they will do the same, according to the survey.

“U.S. companies appear to place more orders with Vietnamese firms,” said Kenichi Kitazawa, general director of Altech Asia Pacific Vietnam Co., a local arm of Japanese machinery trader Altech Co.

Exports to the U.S. market by his company's clients in the soft packaging industry are increasing, he told NNA, adding the clients have become more conscious of quality.

Kitazawa also pointed out that there have been increasing orders of food processing machines from client firms who are relocating production bases from China to Vietnam.

Vietnamese exports to the United States in the first five months of this year surged 29 percent from a year ago to $22.7 billion, according to Vietnamese government data.

A separate NNA survey on 119 Japanese manufacturers operating in China in April and May this year showed 51 percent had suffered a decline in sales or orders “somewhat” or “greatly.”

Among the respondents, 10 percent said they will cut output in China, while 18 percent said they will boost production in other countries, the survey found. (NNA/Kyodo)