In recent years Vietnam has emerged as one of the largest and most successful manufacturing hubs in Asia and is fast becoming a cheaper alternative for quality products than its Asian neighbours.
With its strategic location, younger population and lower costs than China, it has drawn the likes of Samsung Electronics, Intel and Siemens, plus many leading clothing manufacturers to its shores.
Last year Vietnam became the biggest exporter to the USA from amongst the South East Asian nations
The backbone of manufacturing is composed of five industries—agribusiness, leather, wood processing and products, metal products, and apparel—which together account for 40 percent of commodity exports. As of 2013, there were more than 475,600 registered manufacturers in the country, the majority of which were small and micro enterprises serving the domestic market
The Vietnamese government encourages manufacturing through special zones featuring lower corporate income tax rates and limited-duration tax exemptions. Foreign investors in Vietnam also benefit from favourable tax rates on corporate income (22 percent) and dividends (0 percent), with plans stated to lower the former to 20 percent by 2016. Wages are at the lower end of the spectrum across Asia’s manufacturing hubs, at nearly half those of China (and less than half when adjusted for mandatory social insurance contributions).
Recent years has seen global companies transferring their manufacturing and sourcing operations to Vietnam in search of lower operational and labour costs in addition to a more investor-friendly regulatory environment.
Challenges going forward will be training the many low skilled workers so they can operate high technology equipment and improving the coverage of infrastructure.

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