CNBC

Made in Vietnam: US-China tensions spark a manufacturing shift but not without growing pains

Vietnamese firms are starting to grow to try to accommodate the influx of companies, mostly apparel and shoe makers.

Textile firm TNG Investment & Trading told Quintanilla that it’s never seen an expansion like this before. Last year, the firm hired 3,000 employees, bringing its total to 15,000.

TNG’s Linh Nguyen said it had to build an apartment complex just to accommodate the additional employees. “In order to grow the business, it’s more important for us to build a home for the people than actually building a factory.”

The demand for technical skills is growing in Vietnam, and the Vietnamese government has a goal of training 2 million people in vocational schools.

More than 90% of students trained in technical skills, such as welding or making electronics, can get hired, said professor Nguyen Quang Huy. He told CNBC that it’s “very easy to get a job, and a lot of companies need more people.”

However, Vietnam still lacks much of the infrastructure that has enabled China to become a manufacturing epicenter.

Ramping up the ability to transfer goods from Vietnamese factories to ports will be key. Across the country, railroad lines are sparse compared with China’s, highways are smaller, and it’s still an agrarian economy largely focused on rice.

Vietnam is building a deep-water port that can make transfers easier, but that won’t open for another three years. Source