SOUTH VIETNAM ATTRACTS POTENTIAL INVESTMENTS FROM CHINESE COMPANIES

-August 31, 2010

Vietnamese trade officials have announced on monday that Chinese companies are investing more in Vietnam due to cost advantages and also to gain  better access to the Southeast Asian market.

The cost advantages are potentially vast as average labor costs in Vietnam are half of those in China.

This comes at a time when China is facing labor shortages in some areas and have led to Chinese enterprises and local governments  raising salaries in order to attract more labor.

Rising labor costs in China have pushed domestic companies to alleviate cost pressures by looking at countries such as Vietnam.

This in turn, has pushed domestic companies to consider moving to Vietnam as a way to reduce costs.

This year, a total of 27 provinces, autonomous regions and municipalities in China have so far raised their minimum wage levels.