Vantage | Why world's investors and political leaders are wooing Vietnam

Vietnam, a southeast Asian country, smaller in size than the Indian state of Rajasthan, with a population of 100 million and among the fastest growing economies in the region.Vietnam is on the global map as a magnet. It is winning over leading investors. Securing big deals and big money and attracting the biggest global companies like Samsung, LG, Foxconn and Apple. And the world is taking note.World leaders are visiting Hanoi, the capital of Vietnam. In September, US President Joe Biden visited Vietnam and now, Chinese President Xi Jinping has landed there on Tuesday morning for his first visit in six years.The purpose of the visit is strategic and commercial, Xi wants more synergy with Vietnam. Reports say, on day one, he's signed 37 agreements there.The biggest headline is a rail project called ‘Hanoi Light Rail Line Two’ — a cross border rail project that could boost trade.Xi Jinping has also called Vietnam — a diplomatic priority. He said China and Vietnam should seek ‘mutually beneficial solutions’ to disputes. Xi was talking about the disputed South China Sea. Both China and Vietnam claim parts of it.Though China has been aggressive, its forces bully and provoke neighbours, but today, President Xi has promised stability. Basically, he's making an outreach.That tells you a thing or two about the growing significance of Vietnam. The US fought and lost a long war here. Decades later, the US president came to woo Vietnam. The Chinese have been trying to browbeat it, but now their president is talking about synergy.So the question is: What makes Vietnam so important to both political and business leaders? Why are they investing in it? What is Vietnam's Unique Selling Point (USP) that makes it so appealing?Vietnam is well connected and strategically located. It sits at the crossroads of international trade. Businesses operating from here can access 55 markets around the world including 15 G20 countries. Plus, they have good infrastructure.One estimate says: Vietnam has over 300 ports and more than 20 airports. Thanks to its location it has easy access to major economies and markets like China, India, Japan and South Korea. Ships from Vietnam can access the US too — from the South China Sea to the Pacific ocean. Businesses like this connectivity.Also, the workers are widely available, and at competitive rates. In Vietnam almost three dollars is paid for one hour of work. On average, Vietnam's labor costs are half as much as China's labor costs at US $2.99 (VND 68.000) per hour compared to US $6.50 (VND 148.000) per hourFurther, Vietnam has political stability. In 2020, the US State department looked into Vietnam's investment climate and stated: Vietnam's "political and security environment is largely stable. Protests and civil unrest are rare, though there are occasional demonstrations against perceived or real social, environmental, labor, and political injustices."While as per the British government: “Vietnam is one of the more politically stable countries in Southeast Asia."Remember, this is a single party state and a communist country. But it's very different from China. It has none of the policy fluctuations that Xi Jinping likes to spring upon Beijing.In Vietnam, the focus is on enabling growth and the numbers speak for themselves.A Japanese investment bank did a study recently which looked at 56 companies that left China and 26 of them went to Vietnam, which is the highest number. And now, even Chinese suppliers are moving to Vietnam.Chinese firms spent the first 50 days of 2023 investing in 45 new projects in Vietnam, the most from a single country. In the first 50 days of 2023 Chinese suppliers launched 45 projects in Vietnam. These are companies that make a range of goods — from solar panels to electronics, robotics and home appliances etc.Plus, foreign investment has shot up in Vietnam. It has received FDI commitments worth over 25 billion dollars. Almost 15 percent more than last year, and October saw a big bump. Foreign investment commitments in October were worth $5.3 billion, against a monthly average of $2.2 billion in the rest of the year. With this its new monthly average is 2.2 billion dollars. So this is a jump of more than 100 percent.Last year, Vietnam saw a growth rate of eight percent, which was highest in Asia. And now, as the world de-risks or de-couples from China, it is a turning point for Vietnam. This could be the making of a new ‘Asian Tiger’.Views expressed in the above piece are personal and solely that of the author. They do not necessarily reflect Firstpost’s views.Read all the Latest News, Trending News, Cricket News, Bollywood News,India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.