Standing in the shadow of China
HO CHI MINH CITY, Vietnam — Vietnam’s history with China has been long, complicated, and difficult. Vietnam’s future with China may also be long, complicated, and difficult.
The two countries produce many of the same kinds of goods, especially textiles. But China, with its billion-plus people, dwarfs Vietnam’s 85 million. China’s factories have economies of scale Vietnam will never be able to accomplish, and government officials and businesspeople here have come to terms with that, and that’s ok by them.
“Even though China is very big, they cannot have the whole world,” one trade official told us.
So, how will Vietnam (a WTO member for just a year, by the way) compete with China, when they can’t possibly compete on pure price and quantity?
By focusing on quality. We visited the factory of Garment Company 10, also called May 10, on the outskirts of Hanoi yesterday. “We focus on the higher luxury products,” said Nguyen Thi Thanh Huyen, the company’s general director.
May 10 make clothes for the likes of JC Penney, Perry Ellis, Express, Liz Claiborn, and DKNY for the American market, and for Pierre Cardin, Celio, and Seidensticker for the European market.
As we walked around the factory, it was clear that the goods were quite, well, good. We saw $600 suits for the Japanese market and some very nice Seidensticker shirts for the German/European market.
It may end up being a winning strategy. Stay tuned for more on China…