Viet Namﾂ’s lower labour costs attract Japanese investors

Japan leads a corporate shift to Viet Nam in its hunt for lower cost labour, the UK ﾂ"Timesﾂ" reported on September 5.

From high-tech consumer electronics and solar panels to bathroom tiles and tanker hulls, corporate Japan is leading an Asian manufacturing switch to Viet Nam, Eastern Europe and South America in its relentless hunt for lower labour costs, the newspaper said.

It is Japan to which the eyes of manufacturers around the world are now turned, the Times said, adding that towering over corporate Japan's recent strategic rethink is the economic rise of Viet Nam.

They began to invest heavily in Viet Nam after the SARS crisis of 2003, which, for a while, appeared to threaten the viability of Japanese factories in China. The military coup in Thailand last year has also forced the Japanese to reconsider projects there, the paper added.

According to the newspaper, Japanese chief executives, whose 2006 investments in Viet Nam were twice those of the previous year, at 1.3 billion USD, believe that Viet Nam's work ethic is closer to Japan's, in terms of a strong belief in quality.

One thing comes to my mind after reading this article, and this it it - Following yet another recall of toy products made in China on the grounds of Health and Safety, if companies are going to be encouraged to move to Vietnam as costs will be lower there, will cutting costs result in cutting corners? If products are made by the lowest bidder who pay pittance in wages to staff, are the public in other countries who buy these products going to be ripped off. I certainly hope not.

Recently China has had the spotlight thrust upon it for bad workmanship and bad health and safety practise. I do hope the same thing does not happen to Vietnam in months to come.