Chinese firms, anxious to avoid choppy geopolitical waters, chart a course for Vietnam

Carl Ying gets a throbbing headache every time a new season for orders rolls around.

In recent years, the electric shaver exporter has seen fewer purchases from his United States-based clients.

But the obvious impatience he observed late in 2023, when they discussed this year’s shipments, was a worrying sign their relationship may be at stake.

“They told me to go outside,” he recalled. “It’s their suggestion of relocating to a country with lower costs.”

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Quarrels like these are common for Chinese exporters amid protracted trade tensions with the United States and an exodus of manufacturers to cheaper locales like Vietnam.

Ying has supplied a majority of his products to American barbershops and beauty parlours for years through his two factories in China.

But many of his entrepreneur friends have already moved, in whole or in part, to Vietnam. Tariffs had taken a heavy toll on their profits and threatened to drive them out of the business.

“I may go there someday,” said Ying, who paid two visits to Haiphong last year. The Vietnamese coastal city is already packed with factories backed by Chinese investment.

Vietnam is often the first choice when Chinese manufacturers consider relocating overseas, because the country has a large working population and easier access to developed markets.

“Vietnam is an important locality for firms that want a China+1 strategy,” said David Zweig, professor emeritus with the Hong Kong University of Science and Technology.

“Chinese factories that are manufacturing for these US firms and then shipping the goods to the US are going to have to follow their customers and go to Vietnam.”

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