Recently, a report stating that "44% of manufacturing investors are moving their businesses out of Vietnam" has caused a stir in the industry, appearing to be a "warning of a factory closure trend," but when we dig deeper into the source of the information and the context, we find that the situation is far more complicated.

Report screenshot

The data comes from a market research report released by PwC on June 24, focusing on corporate responses to the U.S. imposing retaliatory tariffs on Vietnam.

44% of Investors Moving Production Out of Vietnam?

The report indeed mentions:

"Approximately 44% of manufacturing companies are relocating some of their production activities to countries outside Vietnam," which has become the main evidence for the claim of "decline in Vietnamese manufacturing."

But we need to remind you - do not interpret "partial transfer" as "complete withdrawal."

The real meaning is: multi-location layout, not leaving Vietnam

We have sorted out the specific content and background of the report and have come to three more accurate facts:

First, companies are only "partially shifting capacity," not truly withdrawing in large numbers

The 44% refers to companies diversifying their risk by considering moving some production segments to other countries, such as Indonesia, Bangladesh, Mexico, etc., while keeping the main production lines in Vietnam.

Second, tariffs are a variable, but not the only deciding factor

The U.S. began imposing tariffs as high as 46% on certain Vietnamese exports in April, including shoes, clothing, agricultural products, and furniture, forcing companies to make flexible adjustments.

But apart from tariffs, rising labor costs, reliance on Chinese raw materials, and fluctuations in the business environment are deeper challenges that are the real burdens on Vietnamese manufacturing.

Third, PwC's data comes from company questionnaires, representing intentions, not definite actions

These numbers reflect "considering relocation" or "already initiating multi-location layouts," not "factories have already closed," nor does it mean Vietnam is no longer one of the global manufacturing centers.

US wants Vietnam to "decouple from China"

But can Vietnam do that?

A supply chain advisor familiar with the manufacturing sectors of China and Vietnam stated:

"The US wants Vietnam to take over the role of replacing China, but also wants Vietnam to stop importing from China, which is fundamentally a dilemma."

PwC also pointed out in the report that the pressure the US government is exerting on Vietnam is not just the tariffs themselves, but also a strategic requirement to "reduce dependence on Chinese raw materials." However, the reality is that 80% of raw materials for Vietnam's textile and shoe industries come from China, making it almost impossible to achieve independence in the short term.

Will the Vietnam myth collapse?

No, but the bubble is tightening

Over the past five years, Vietnam was one of the biggest beneficiaries of the U.S.-China tariff conflict, but as revealed by this report, the state of "risk-free growth" has ended.

Tonight, Vietnam faces a more complex world:

The U.S. market is on guard

Chinese raw materials cannot be separated from

Local policies and land costs are getting higher

At the same time, emerging manufacturing countries like Indonesia and Bangladesh are watching closely

In short, Vietnam is moving from being a "global alternative" to becoming a "candidate for replacement."

In conclusion:

In an era where global manufacturing is entering a "multi-node" and "decentralized" stage, no country can long monopolize the benefits. Whether Vietnam can complete structural transformation under pressure and maintain its core position as a Southeast Asian manufacturing hub is the real issue.

For the footwear, textile, and assembly industry chains, this also means a realistic judgment: customers are changing, taxes are changing, and the market doesn't wait.

Note: The content of this article is for industry exchange and reference only, and does not constitute any investment advice.

Source: Professor of the Footwear Industry

Original: https://www.toutiao.com/article/7524526291828097545/

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