Source: Procurement News

Vietnam is stepping up its challenge to China to become the world's key manufacturing hub, experts reveal.

Rising labour costs and cultural shifts in China are pushing manufacturers to look for new sourcing options and many are rediscovering Vietnam, according to media reports.

The Journal of Commerce (JoC) notes that transportation leaders are responding to this upsurge in interest in Vietnam with investment in the developing nation whose business managed to grow last year as others struggled.

The prediction comes as Vietnam's prime minister reported at last week's World Economic Forum on East Asia that its economy will grow 6.5 to 7 per cent this year after expanding 5.3 per cent in 2009.

PIERS Global Intelligence Solutions, a sister company of The Journal of Commerce, forecasts increased US imports from Vietnam of 41.6 per cent and exports of 16.3 per cent this year.

In the first four months of 2010, exports of computer and electronics jumped 40.8 per cent, compared to the same period last year, said International Market Assessment Asia (IMIAsia). "In effect, we are seeing a very fast transformation of Vietnam's light industrial base," Richard Martin, managing director of IMA Asia, told JoC.

The report pointed out that infrastructure investment is growing to meet the demand. In the face of recession cutbacks, six leading container lines initiated direct Vietnam-US services, and operators opened four new terminals, with two more expected for 2011.