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This is a race not formally announced but in which every south-east Asian country and prominently India in south Asia are keen participants. The competition is about getting as big a slice as possible of manufacturing capacity touching electronics and telephony to engineering products that is gradually being moved from China by MNCs, principally headquartered in the US and Japan to relatively low cost regions, as part of the China plus one policy. Saving in cost is definitely a consideration for paring MNC manufacturing exposure in China.

Consider Vietnam, which because of state focus on education, boasts of a plentiful supply of educated, hardworking and disciplined workers needed by new generation industries. What further draws MNCs to employ Vietnamese workers is their availability at almost half the cost of Chinese peers in their country’s coastal regions. Manufacturing wages in Vietnam remain the lowest in the entire south-east Asia barring the Philippines.

Cost advantage was certainly not at the top of mind of policy makers of countries now in pursuit of decoupling from China wherefrom earlier huge investments were supporting capacity building of many industries, including hi-tech ones in China and in the process becoming too critically dependent on a single supply source. Geopolitical considerations, growing frictions in trade relations leading countries such as the US, EU and India hauling China to WTO (World Trade Organisation) for dumping of a number of products, including steel and aluminium, arbitrary Chinese policies that became palpably evident during Covide19 pandemic management and reservations about the uncommonly strict data privacy law have underpinned the need to promote investment in other Asian countries that will supplement or cut capacity in China.

Over the years supply chains based in Asia have expanded well beyond China to include Vietnam, India, Indonesia and the Philippines. “We are supplying finished products in large volumes to the US and EU. However, for components and parts we continue to remain dependent on China. The much publicised decoupling from the Chinese economy and all the efforts to expand the supply chain beyond the world’s second largest economy may not have hurt China that much till now. Whatever that may be, Vietnam’s reputation is no longer based on as a global supplier of clothing to American and European companies but of products based on very high technology,” a local head of a leading MNC told this reporter on condition of anonymity.

Because of its strategic location sharing terrestrial and maritime borders with China being wooed by both Washington and Beijing and a population of over 100 million with a per capita income of $4,163.5 in 2022 (source World Bank), it is only natural that MNCs, including the ones dealing with pinnacle of technology, will have a growing presence in Vietnam. From FMCG groups Unilever to Nestle to Procter Gamble to IT companies Microsoft to IBM and Samsung among electronics items manufacturers are finding their businesses growing here.

In Apple’s diversification of supply sources from China, the two countries figuring prominently are Vietnam and India. For Cupertino (California) based Apple, makers of iPhone and MacBook, shifting geopolitical tides, triggered by among other issues President Xi Jinping’s instruction to his military to be prepared to invade Taiwan by 2027 and President Biden’s resolve to defend Taiwan in such circumstances, it has become imperative to ensure that iPhone supplies are not disturbed. Therefore, the company with market capitalisation of $2.87 trillion is constrained to hedge its bet on Vietnam and India by supporting suppliers there.

For example, the Tata group, which already owns an iPhone factory in Karnataka acquired from Taiwanese company Wistron will commission a greenfield iPhone assembly plant at Hosur in Tamil Nadu in the next 18 months. Going beyond assembly, the group has started making iPhone enclosures or metal casings.

ALSO READ: Why Singapore Manufacturers Are Moving To India

In the meantime, Taiwan based electronics manufacturing group Foxconn is successfully running an iPhone assembly unit, one of the largest for Apple outside China, at Sriperumbudur in Tamil Nadu. Production now at 6 million pieces is to be rapidly expanded. In this context, the Wall Street Journal says in a recent report: “Apple and its suppliers aim to build more than 50 million iPhones in India annually within the next two to three years, with additional tens of millions of units planned after that.”

In India suppliers to Apple, however, have to contend with poor infrastructure, logistical challenges getting slowly resolved and trade union issues. Interestingly, China in spite of staying in command of the communist party is spared labour problems. Whatever the challenges of being here, Apple CEO Tim Cook’s visited India in April last and met prime minister Narendra Modi to convey the company’s commitment to be part of this country’s digital journey. In the meantime, the two flagship Apple stores in Mumbai and Delhi that Cook opened have in a short time proved a roaring success. In Vietnam too, Apple products have caught the imagination of the people, especially the young, following the launch of online Apple store and backup service from the online team.

In terms of range products made for Apple by its suppliers, Vietnam has remained nonpareil in Asia outside China. The bright spot that Vietnam is for Apple in its China decoupling move will very substantially increase capacity to make IPads, Apple watches, MacBooks and AirPods by 2025 considering fresh capacity building investments being proposed by existing and new suppliers. For example, Foxconn is to make growing volumes of iPad and MacBook in Vietnam. As the company is in the process to invest $270 million to build a new factory there, one of its subsidiaries is to exclusively supply made in Vietnam servers for Apple to train and test AI services. A shining example of going up in the production value chain. The Taiwanese Compal Electronics, a major supplier to Apple, is too rapidly expanding capacity in Vietnam.

Not only in IT and electronics, Vietnam, according to CLSA, a bank, received in the first three quarters of 2023 foreign direct investment (FDI), which as a share of GDP was twice as large as in Indonesia, the Philippines or Thailand. Whatever that is, neither Hanoi nor New Delhi will not be able to wish away the fact that for many critical components, the two countries continue to remain hopelessly dependent on supplies from China. FDI that propels growth as also supply of technologies fell 16 per cent for India to $70.9 billion in 2022-23 from $84.84 billion in the previous year.

In contrast, a much smaller country Vietnam found FDI rising to $36.6 billion in 2023, a jump of 32.1 per cent year on year. This incidentally happened to be the highest FDI received by Vietnam in the past five years, underlining the destination’s attractiveness to foreign investors, especially the ones keen to reduce their Chinese profile.

The more important considerations that have helped Vietnam to attract FDI from a number of destinations – in 2023, the country received investments from as many as 111 countries – are: adroitness with which the regime continues to handle two antagonists, namely, the US and China; over three and a half decades of opening of the economy and reforms since the end of collectivism; building of human resources to support investment in new generation industries; and incentive package for foreign investors. But now inertia has set in in decision making, specially when it comes to giving approvals to new projects for fear of being hauled up on corruption charges. The inactiveness of politicians and bureaucrats at every level is due to the launch of anticorruption drive some time ago.

Incidentally, President Nguyen Xuan Phuc was forced to resign in January 2023 along with some ministers as part of an anti-corruption campaign. No wonder The Economist highlights “big risks to Vietnam’s tigerish emergence. Its geopolitical sweet spot may not last – especially if Donald Trump returns to power and takes exception to the size of America’s bilateral trade deficit with it. The beneficial demography underlying its growth is weakening.” But the most disturbing phenomenon, according to the magazine, is the rulers’ “resistance to political reform.”

(The writer was lately in Vietnam)

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The global fault-lines, which have been ripped open after the ongoing genocide in Gaza, has been unparalleled in world history, especially in the recent past. For instance, western opinion and active participation consequent to the Russian invasion of Ukraine, including the order of the International Court of Justice in Hague on Russia, has had no impact on Vladimir Putin.

The mindless war continues with thousands dead across both sides, many of them with shared families, cultures and memories, who fought the Nazis together during and after the Holocaust, and made massive sacrifices. More than 20 million people of Soviet Russia died fighting the fascists. Also, after the Russian invasion, if the heart of America, Britain, France and Germany beats so hard for Ukraine, whatever happened in Gaza?

Remember the ethnic-cleansing and repeated massacres of one community during the civil war in Serbia-Bosnia-Herzegovnia — this too was happening right inside the heart of Europe. It took the entire West months of deadpan detachment to act, before NATO unleashed its jet aircraft and bombs. Slobodan Milosevic, the Butcher of Serbia — was he punished in his lifetime? Many of these butchers were, ironically, former communists in Yugoslavia.

Come to think of it, till the time Adolf Hitler attacked Poland in 1939, America and Europe acted totally blind to the long convoys of trains taking millions of Jews to the gas-death chambers, zigzagging through Europe. They simply chose to look the other way, even while France and Britain pretended to be helpless after the extermination of most of their young men in the first world war, another mindless war where the League of Nations was as impotent, as has been the role of the United Nations during the NATO wars unleashed in Iraq and Syria, the American invasion of tiny Vietnam earlier, while backing dictators of sundry banana republics in Latin America.

Did anyone ever say that George Bush was a war criminal for the tens of thousands of Iraqis dead whereby they did not find one weapon of mass destruction in this insatiable American quest of ‘blood for oil’? And that Bush too should have been hauled up in the International Court of Justice (ICJ) in Hague like Ratko Miladic, for the mass murders he unleashed in what was former Yugoslavia? Or Hillary Clinton, for unleashing a relentless wave of destruction in Syria and the bestiality unleashed in the murder of Gaddafi in Libya?

Imagine the mass suffering, as a civil war erupted in Iraq, with the war splitting over to Syria unleashed by Clinton and Barack Obama, with entire communities of Yazidi women taken as sex slaves by the ISIS. Who were the patrons of ISIS and where did they get their arms? The American regimes and its allies have their best interests in keeping the pot boiling in the Middle-East till the time oil exists in its vast underground, and till the time Israel can be used as a strategic military force by the US.

ALSO READ: Gaza – Where Tears Have Run Dry

The ICJ did not order Israel to stop its armed assaults – it has asked it to stop its genocidal actions, thereby recognizing that it is a genocide and that the situation in Gaza is catastrophic. While it may take years to give a final judgement, it has largely followed the nine “provisional measures” demanded by South Africa. It is significant that South Africa which suffered an apartheid regime backed by the US and Britain, is now fighting another apartheid regime, backed by the US and Britain!

The 17 judges in Hague ordered that Israel should do everything in its power to avoid killing Palestinians, causing them serious bodily or mental harm, creating unlivable living conditions in, or intentionally preventing Palestinian births, which is a pointer to scores of children being killed due to the bombing of hospitals, the murder of doctors and nurses, and stark absence of medical facilities.

Pointing at the crass declarations by politicians, including Israel’s president and defence minister, calling for the elimination of all Palestinians, including children and women, branding the people of Gaza as animals, etc, the court said that Israel should do more to “prevent and punish” public incitement to genocide. The court ordered “immediate and effective measures” to look into the humanitarian catastrophe.

Isreal can disobey the order, but it is morally bound to obey it, even as it its government is totally isolated across the entire globe, while there have been huge protests in Tel Aviv asking Benjamin Netanyahu to quit. Indeed, the Hague ruling is unprecedented because it has created a huge public perception against Israel across the globe, and serious moral dilemma for the US, Britain, Germany and France, who are openly backing the mass murder of children in Gaza, with Joe Biden actually funding the bombings with millions.

Called ‘Genocide Joe’ now, even by his Democrat supporters, especially the millennials, and hitting 80, there have been massive protests in America (300,000 in Washington DC) and in Europe (half-a-million in London) – as well as in other nations. Even the caucus rally in South Carolina by a thoroughly discredited Kamala Harris had Palestinian flags in the audience.

Indeed, Jewish Groups for Peace in America have been the most vociferous against Netanyahu’s brand of Zionism, whereby he is using mythical narratives to unleash the savagery. The role of notorious Jewish lobbies, including among big business and multinationals, have been dissected publicly by activists, academics and journalists, especially that of the shadowy America Israel Pubic Affairs Committee (AIPAC). Not only does this outfit have tremendous power over various American regimes, both Republicans and Democrats, with their huge money resources and powerful connections, they can shape the destiny of the presidential polls in America. There are allegations that they are pumping in huge money to get those candidates defeated who have opposed the regime in Tel Aviv.

It is indeed a bad faith choice for Americans now, between two very old and unprincipled men who have discarded all values of basic humanity and ethics, and who seem untouched by the 10,000 dead children, the daily violation of international laws, the bombing of churches, mosques, schools, university campuses, refugee camps, hospitals, the killings of more than 100 journalists. They stand totally committed to the ultra-orthodox, Rightwing, extremist Israeli regime, and its barbarism in Palestine.

For a capitalist empire with vast inequalities and thousands of homeless on its big city streets in this freezing cold, the collective guilt and anxiety for its relentless mass murders across the globe – from Vietnam to Gaza – is a psychological epidemic. That thousands have consistently protested across its cities, especially women and the young, only shows that a regime which feeds on barbarism has no democratic credibility, and is as inhuman as any other totalitarian or fascist regime.

With all credit to the West and Europe for its resurrection of arts, architecture, classical music, cinema, academics and culture in the post-war scenario, its governments are most often followers of the Hobbesean principle – they are short, nasty, brutish and barbaric. And that they care a damn for democracy, higher civilizational values, and basic human conduct.

Hence, this high moral ground with which the white empire looks down at the Orientals, has been yet again exposed with its total endorsement of the genocide in Gaza. Yet again, it has taken 25,000 human beings to die by Hiroshima-Nagasaki type of bombing, including 10,000 plus children, and infinite suffering and injustice, to show the cracked, blood-stained mirror to these western empires.

Indeed, it is the people of these countries, now on the streets in mourning and in protest for Gaza – they must show the way. It’s time the West and America discovers a radical paradigm shift in its politics, and creates a new counter-culture of humane civilizational evolution, defying the medieval cruelties of the present and the past. Or else, it would continue to be Eyeless in Gaza and other endless stories of stark silence and barbarism!

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Tag: Vietnam

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