Expert advises caution on Vietnam’s prospects in the US-China trade war

Expert advises caution on Vietnam’s prospects in the US-China trade war

The hype about Vietnam being a winner of the ongoing United States-China trade war must be met with caution, says former US trade negotiator and RMIT University visiting professor Stephen Olson.

The hype about Vietnam being a winner of the ongoing United State-China trade war must be met with caution due to the limited size of Vietnam’s workforce and infrastructure, says former US trade negotiator and RMIT University visiting professor Stephen Olson. The hype about Vietnam being a winner of the ongoing United State-China trade war must be met with caution due to the limited size of Vietnam’s workforce and infrastructure, says former US trade negotiator and RMIT University visiting professor Stephen Olson.

In a recent speech at the launch of RMIT’s new Master of Global Trade program, Mr Olson urged policymakers and trade observers to keep a few key factors in mind when assessing the trade dispute’s impacts on Vietnam.

The limited size of Vietnam’s workforce and infrastructure compared to China’s means that many manufacturers will ultimately decide to stay in China and bear the higher costs of exporting to the US.

“Think about some of these competitive advantages. Think about the workforce. Here in Vietnam, you have about 14.5 million industrial workers; in China, 200 million. But it's not just a question of scale. It’s a question of skill. China’s workforce is highly skilled, in particular possessing the technical expertise that is required – an absolute prerequisite – for advanced manufacturing in areas like aerospace or sophisticated medical appliances,” said Mr Olson, who is a Research Fellow at the Hinrich Foundation.

“Also, think a little bit about infrastructure – the roads, the ports, the bridges and the railways that are so central to the decision of, ‘Where are we going to put a production facility?’ and, ‘How are we going to structure our supply chains?’. If you look at the top 10 largest ports in the world, six of them are in China. The largest port in Vietnam is here in Ho Chi Minh City. It is number 25.”

Mr Stephen Olson, a Research Fellow at the Hinrich Foundation, urged policymakers and trade observers to keep a few key factors in mind when assessing the impacts on Vietnam at the Master of Global Trade roundtable discussion. Mr Stephen Olson, a Research Fellow at the Hinrich Foundation, urged policymakers and trade observers to keep a few key factors in mind when assessing the impacts on Vietnam at the Master of Global Trade roundtable discussion.

A rising trade surplus with the US, generated by those manufacturers that have opted to relocate to Vietnam to avoid higher tariffs, risks putting Vietnam on President Donald Trump’s radar.

“I don't have to tell you what the mood is in Washington DC and what the opinion of President Trump is towards countries that have big trade surpluses with the United States. Vietnam is in danger of attracting a lot of very undesirable, unproductive attention from Washington DC,” he said.

Mr Olson will be among the industry experts teaching alongside RMIT academics in the Master of Global Trade, which is currently receiving applications from new students for the February 2020 intake. 

The program, developed in partnership with the Hinrich Foundation, aims to develop the future generation of leaders in trade-related industries.  

With the world entering a new era of volatility in international trade, Mr Olson said professionals with a sophisticated understanding of trade, trade issues and the trading system would be in high demand.

“This is a big part of what we’re going to deliver to you in this Master of Global Trade program – to equip you to deal with this new world of international trade,” he said. 

(From left) The global trade roundtable discussion welcomed the presence of Hinrich Foundation Research Fellow Mr Stephen Olson, Nestle Vietnam Human Resources Director Ms Truong Bich Dao, Head of School of Business & Management Associate Professor Mathews Nkhoma, and Hinrich Foundation Program Director Mr Alex Boome. (From left) The global trade roundtable discussion welcomed the presence of Hinrich Foundation Research Fellow Mr Stephen Olson, Nestle Vietnam Human Resources Director Ms Truong Bich Dao, Head of School of Business & Management Associate Professor Mathews Nkhoma, and Hinrich Foundation Program Director Mr Alex Boome.

Applications to study in the Master of Global Trade program for the February 2020 intake close on Friday 14 February. For more information and to learn about the scholarship opportunities available, visit https://www.rmit.edu.vn/study-at-rmit/postgraduate-programs/master-global-trade

Story: Simon Gladman

14 January 2020

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