US-China trade war's pains and gains: Investment floods Vietnam but exposes limits of its economy

As the US-China trade war rages on, companies have started moving their production bases from China to South-east Asia to avoid American tariffs. While the shift has given an economic boost to countries like Vietnam and Cambodia, suppliers face challenges such as infrastructure bottlenecks and a lack of skilled labour in these fledgling economies.

At the Que Vo industrial park, an hour's drive north of Hanoi, GoerTek's gambit to skirt American tariffs is taking shape.

Last year, the Chinese company, which makes AirPod earphones, became the first Apple supplier to say it would shift some production out of China. It has since vastly expanded its presence in Vietnam with a US$260 million (S$356 million) facility.

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A version of this article appeared in the print edition of The Straits Times on June 17, 2019, with the headline 'Investment floods Vietnam but exposes limits of its economy'. Print Edition | Subscribe