Everyone that has listened to my podcast knows that I am a fan of Asia, in particular SE Asia and even more so of Việt Nam. A piece of writing by Simon Black that is spot on:
March 7, 2016: Every time I come to Việt Nam, I’m always astounded at the incredible growth and opportunity here.
This time around I’m reviewing a number of suppliers to buy raw materials from for a new business we’re acquiring in Australia.
Just a few years ago those supply contracts would have easily been awarded to companies in mainland China.
But today Việt Nam is beating the pants off the Chinese.
In large part due to China’s long-term growth over the past 10+ years, wages and input costs in mainland China have increased dramatically.
China might still represent the best value for money when manufacturing high-end electronics like iPhones.
But due to the rise in input costs, China can’t compete when making socks or producing fabric. They’re no longer cost competitive.
That business is going to Việt Nam, one of the cheapest places in Asia to produce.
In many respects Việt Nam is the ‘new’ China, or at least where China was a few decades ago.
There are 90 million people in this country. Most of them are very young–Việt Nam boasts one of the youngest demographics in the region.
(Conversely, China’s demographics are precariously upside down thanks to decades of its absurd One Child Policy. This is going to be a HUGE problem down the road.)
Wages are much lower in Việt Nam, and there’s an enormous amount of manufacturing capacity.
As a result the country’s exports have grown dramatically, by as much as 3,000% in the last two decades; much of that growth is from the last few years.
This economic growth is having a visible impact on the country.
Every time I come here it’s noticeably better–more advanced, more developed, more modern, and more free.
And for expats in particular, the country is amazing.
Rent costs nothing. Food costs nothing. Domestic help costs nothing. Mobile and broadband costs nothing.
The lifestyle you can achieve here on a very modest budget is incredible.
And it’s a lot of fun here. Ho Chi Minh and Hanoi are both wonderful, thriving cities, along with Nha Trang, Hoi An, and Da Nang.
Plus Việt Nam’s coastline is one of the most exquisite on Earth. Definitely put it on your bucket list.
Việt Nam may become one of the top expat destinations in the world as more people are drawn to the high quality, inexpensive lifestyle in a country with substantial opportunity.
Last year Việt Nam’s government continued its trend of loosening a number of restrictions.
And in addition to making it easier for locals to work hard, produce, and thrive, they even made it much easier for foreigners to visit, stay, invest, acquire shares and property, etc.
(Incidentally, property rental yields in Việt Nam tend to be high, and companies listed on the stock exchange sell for big discounts to their net tangible assets.)
It’s incredible that those opportunities exist today.
It wasn’t that long ago when Việt Nam was one of the most closed, despotic, impoverished countries in the world.
Things finally started to change in the late 1980s when the Communist government opened up and encouraged private business ownership and free market incentives.
There’s still a long way to go.
But the trend is obvious.
Việt Nam has gone from being ‘the Cuba of Southeast Asia’ to a country with more opportunity, fewer restrictions, and one of the fastest growing middle classes in the world.
It just goes to show how powerful freedom can be: prosperity rises when a nation progresses from ‘unfree’ to more free.
(Sadly the opposite trend in freedom and prosperity is playing out in the West.)
Keep Việt Nam on your radar, it’s definitely a trend you want to know about.
He is so right on. And if anyone knows Simon please make the introduction for me.
Note: Paul Mulvaney has said he wants to skip Skype and do a podcast interview in the country. I just need to pull him away from London! Time for a trend following event in Việt Nam. Also, shout out to Jim Preston for the article find.