Once upon a time, global manufacturers looked at China and thought, “Ah yes, the promised land.”

 Cheap labour, world-class infrastructure, and an ever-reliable workforce that could churn out everything from your fancy smartphones to those suspiciously cheap plastic toys that fall apart before you even get home.

But times change. 

Costs are rising, trade tensions are mounting, and businesses are rethinking their dependence on a single manufacturing giant.

 Suddenly, eyes are shifting south to Vietnam.

So, what exactly makes Vietnam the next big thing? 

And why should businesses start packing their bags (or at least their factory blueprints) for this Southeast Asian powerhouse?

On today's episode of You Don’t Know Vietnam, we sit down with Jenny Nguyen from InCorp to break it all down.

Key takeaways:

• China’s dominance is fading
• Vietnam is the smartest alternative
• Relationships always better than contracts
• Waiting is the biggest mistake

Why China is no longer the only option

For decades, China was the world’s go-to for manufacturing. 

Need a factory? China’s got thousands. 

Need it cheap? No problem. 

Need it fast? Sorted

But then came the great disruption. COVID.

Rising wages, a shrinking workforce, and, of course, the ongoing trade war between China and the US turned what was once a no-brainer into a major headache.

Suddenly, business started looking elsewhere, and Vietnam found itself in the perfect position to say,  “Welcome, we’ve been expecting you.”

Vietnam’s Foreign Direct Investment (FDI) hit $25,35 billion in 2024, a 9.5% increase from the previous year. 

“Vietnam is benefiting from the China-US economic war.” Jenny explains. “I've seen companies move their manufacturing from China to Vietnam… If you are working in manufacturing, you may consider Vietnam because we do have better tax.”

And let’s not forget the China+1 strategy, where businesses diversify their supply chains by having a presence in Vietnam while keeping their operations in China.

It’s like dating someone new while keeping your ex on speed dial… just in case.

Vietnam is more than just cheap labour

Let’s be clear: Vietnam’s success isn’t just about low costs. It’s about efficiency, agility, and long-term potential.

Location, location, location

Next door to China.

Close to major shipping routes.

Just far enough from the US-China economic brawls to avoid catching a stray punch.

It’s like moving out of your parents’s house but still being close enough to drop in for Sunday roast.

Infrastructure on the rise

Gone are the days when Vietnam’s logistic network felt like a Choose Your Own Adventure book, where every turn could lead to a dead end.

Major investments in roads, ports, and airports, including the much-anticipated Long Thành International Airport, are making it easier than ever to move goods in and out.

“The new metro in Ho Chi Minh City is finally finished after years of delays”, Jenny laughs. “It’s been built for so long, and now it’s finally finished. We finally have a metro!” 

Small victories, big impacts.

Strategic trade agreements

Vietnam has locked down trade agreements with the UK, EU, and major Asian economies, making it easier for businesses to operate tax-free or with reduced tariffs.

Take that, bureaucracy!

A young, skilled workforce

With over 50% of its population under 35, Vietnam’s workforce isn’t just young: it’s hungry.

Workers are upskilling fast, with a growing number trained in high-tech manufacturing, IT and engineering.

But, of course, it’s not all sunshine and reduced tax rates…

Vietnam’s not-so-secret weapon: Chaos

Vietnam moves fast. Blink, and the rules have changed.

Business laws, tax codes, even the names of entire provinces can shift overnight. 

Jenny recalls a case where a friend suddenly found out her land was no longer Hòa Bình province - it had been absorbed into a newly restructured Phú Thọ province.

Welcome to organised chaos.

Business survival here isn’t about predicting the future - it’s about adapting faster than the competition.

The bureaucratic booby trap: What foreign businesses need to watch out for

Let’s talk paperwork.

If you thinking setting up a business in Vietnam is as simple as showing up, shaking hands,and getting started, then think again. This isn’t Vegas.

“The government still has a lot of paperwork for business”. Jenny warns.

Even just registering a company can take weeks or months if you don’t know what you’re doing.

Vietnam is notorious for its red tape and ever-changing regulations. 

A single missing document could send you on a never-ending quest through government offices, each one politely informing you that you need just one more form.

“Sometimes they’ll tell you you’re missing document A. So you go back, get it, and return the next day only to be told that you now need document B. That’s what the Vietnamese government works” Jenny says.

Moral of the story? 

Get a local expert who knows the system. Or prepare for a lot of waiting in line.

Why you shouldn’t wait: The first-mover advantage

Here’s a cold, hard truth: if you wait until Vietnam is the obvious choice, you’ll already be too late.

The businesses that win here aren’t the ones waiting for the perfect moment. 

They’re the ones who are already here, building relationships, setting up operations, and adapting to the chaos.

“By the time everyone’s talking about it, you’re already late,” Jenny warns. “The best time to start was yesterday. The second-best time is now.”

Is Vietnam worth the bet?

So, should you ditch China and go all in on Vietnam? Not necessarily. 

But should Vietnam be a serious part of your manufacturing strategy? Absolutely.

Yes, it has bureaucracy. Yes, it requires patience. 

But it also offers huge opportunities for those who understand how to navigate the market.

So, is Vietnam winning the global manufacturing race?

Not yet.

But it’s moving fast. And the smart money is already here.

The only question is: are you?