Archive for Sunday, August 20, 2006

Made in Vietnam’ becoming more prominent

August 20, 2006

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— Check that label: "Made in China" is starting to give way to "Made in Vietnam."

Taking a page from Beijing's economic playbook, Vietnam is luring makers of shoes, garments and computer chips with tax breaks, inexpensive land and cheaper labor.

Factory wages average $50 to $60 a month - half as much as in manufacturing centers along China's coast. The incentives are so attractive that even Chinese companies are relocating.

Inside the Johnson Wood plant near the rice paddies, hundreds of young migrant workers toil away, making beds and dining sets for American consumers. Chinese supervisors bark orders.

This could be a scene in any number of factories in Dongguan in southern China, the furniture-making capital of the world. But Johnson Wood is in an industrial park outside Ho Chi Minh City in southern Vietnam.

Since 2003, Johnson's owner, Taiwan-based Green River Group, has been steadily moving production from mainland China. The company came to Vietnam to avoid paying penalties on China-made goods, but managers soon found that many business conditions here were better. By early next year, Green River's employees in Vietnam, already 12,000, will surpass its Chinese work force.

"The future is in Vietnam," said Jerry Chang, the furniture maker's general manager.

To facilitate business, Vietnam is building roads, airports and seaports. The country is benefiting from its highly literate population and millions of young workers hungry to improve their families' living standards.

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