tailieunhanh - Production relocation of multinational companies from China and chances for Vietnam

Since the intense US-China trade war and the global outbreak of the Covid-19 pandemic, multinational companies’ tendency to diversify production activities and disperse their foreign direct investment (FDI) out of China became more visible. In this context, Vietnam has the opportunity to become a new global manufacturing hub. | VNU Journal of Science Economics and Business Vol. 36 No. 5E 2020 21-30 Original Article Production Relocation of Multinational Companies from China and Chances for Vietnam Nguyen Thi Thanh Mai Pham Thi Phuong VNU University of Economics and Business 144 Xuan Thuy Cau Giay Hanoi Vietnam Received 08 December 2020 Revised 14 December 2020 Accepted 28 December 2020 Abstract Since the intense US-China trade war and the global outbreak of the Covid-19 pandemic multinational companies tendency to diversify production activities and disperse their foreign direct investment FDI out of China became more visible. In this context Vietnam has the opportunity to become a new global manufacturing hub. It remains to be seen whether Vietnam can attract that FDI inflow from multinational companies MNCs or not especially in the context of unpredictable competition between many potential countries such as India ASEAN countries and China who actively finds ways to retain foreign investors. The objectives of this article are to analyze the trend of relocating production sites of MNCs from China and its causes and factors attracting a production relocation wave in Vietnam thereby giving some implications to increase the difference of Vietnam in this race to attract investment from foreign manufacturers. Keywords Production relocation production strategy MNCs China Vietnam. 1. Introduction 2018 when the US - China trade war became more intense. Simultaneously the Covid-19 During the past three decades China has outbreaks also accelerated this process when always occupied a unique position as the MNCs considered the security and resilience of world factory due to its ability to produce the economy more important than production low-cost goods with cheap labor high output efficiency. MNCs have been applying a and efficiency. However there has long been a China 1 strategy to reduce risks - in which tendency of MNCs to diversify production instead of just investing in China MNCs will .