Vietnam'S Labor Cost Is The Fastest In 7 Years. China'S Population Dividend Is Faster Than Expected.

Nuggets Vietnam demographic dividend

In recent years, the rapid economic growth of Vietnam has become another hot spot for Chinese enterprises to invest abroad.

What is Vietnam's investment environment?

The "demographic dividend", one of China's biggest strengths, has been fading away, and the average age of the workforce has reached 40.

The global enterprises of "Ben Yue" look at Vietnam's "demographic dividend". The average age of the 93 million Vietnamese population is only 29 years old, and 70% of the population is under 35 years old.

Hanoi is in the process of rapid industrialization, with its permanent population reaching 13 million. Young people are pouring into big cities to find jobs. Prices and rents are soaring rapidly.

"The average rent of the 40 square meters in Hanoi is about 1300 to 1800 yuan, and the price is higher."

When an intermediary company introduced a situation in Vietnam, it initially seemed uneventful, but when it came to knowing that the average monthly salary of Vietnam's capital Hanoi was less than 2000 yuan, it felt a lot of rent.

In terms of travel, Vietnam's public infrastructure is weak. Young people prefer to ride a motorcycle to and from work. The purchase price of a motorcycle is basically 1.1-1.5 million yuan.

After listening to the introduction of local friends, let me look at the motorcycle on the street.

Only then did I know that Vietnamese motorcycles were mainly imported, with tariffs up to 70%.

Similarly, Vietnam's cars are mainly imported, with tariffs up to 50%.

Young people in Vietnam are basically "Moonlight tribes". They are still not able to save much money under soaring prices.

During the visit, a number of heads of Chinese enterprises generally expect Vietnam's "demographic dividend" to disappear faster, and the fastest estimated labor cost will be unchanged in China within 7 years.

When entering the Vietnam investment and Development Bank, one of the four major state-owned banks, we saw the interest rate for this year's large deposit certificate: the deposit interest rate was 8.6%.

Vietnam also has four major state-owned banks, Vietnam investment and Development Bank (BIDV), Vietnam Foreign Trade Joint Stock Commercial Bank (VIETCOMBANK), Vietnam Industrial and Commercial Bank (VIETINBANK) and Vietnam agricultural and Rural Development Bank (AGRIBANK).

These four lines occupy about 50% of the national credit scale, and have a high degree of monopoly.

According to statistics, the highest interest rates for Vietnam's long-term deposits over 12 months are 8.6% to 8.7%.

This is the local bank has been raising interest rates for two years, and banks are actively engaged in new reward activities. Customers who deposit 10 million Vietnamese Dong (about 3300 RMB) for any time are given gifts and may be distributed red packets.

Of course, Vietnam now realized the liberalization of interest rates earlier. In March 2017, the Central Bank of Vietnam abolished the quota limit of 20% of the maximum loan interest rate stipulated in the civil code of 2015. The interest rate of bank loans is entirely based on the agreement price negotiated between the credit institutions and the clients.

The central bank controls mainly through refinancing rates and discount rates, and the refinancing rate is 6.25% and the discount rate is 4.25%.

Vietnam's loan interest rate is also higher under the high deposit cost.

In the regular banking sector, the average loan interest rate of Vietnamese residents is 10-11.5%, while the other medium and long-term loan rates reach 11 to 13%.

However, short-term loans and consumer loans are part of the capital channel, and the interest rate as high as 15-20%, the price of capital is amazing.

On the streets of Vietnam, the 4G signal is very clear. The popularity rate of mobile phones is very high. Occasionally, there are one or two newspaper stands.

To buy a copy and return it, the heavy message is that in the first quarter of 2019, Vietnam's merchandise import and export volume exceeded 100 billion US dollars.

In the first quarter of this year, the total value of China's merchandise imports and exports was US $1 trillion.

Vietnam's exports grew by 14% in the first quarter, compared with 6.7% in China.

This growth rate basically continued the momentum of the rapid growth of Vietnam's exports in 2018, and the growth rate of exports in 2018 was 13.3%. Such a rapid growth rate amazed the world.

For a long time, in 2007, Vietnam's import and export volume exceeded US $100 billion for the first time, breaking through US $200 billion in 2011, reaching US $300 billion in 2015, US $400 billion in 2017, and 480 billion 100 million US dollars in 2018, which is bound to break through 500 billion US dollars in 2019.

Obviously, Vietnam's import and export scale is growing faster, especially exports.

Behind this is the influx of foreign capital. 70% of Vietnam's exports depend on foreign investment. Foreign investment growth and export growth are synchronous.

According to the Foreign Investment Bureau of Vietnam's Ministry of investment, Vietnam's foreign investment volume reached $10 billion 800 million in the first quarter of 2019, a sharp increase of 86.2% over the same period last year, the highest level in 3 years. This will further strengthen the development potential of Vietnam's export oriented economy.

On the other hand, the products with larger export growth are mobile phones and parts, textiles, computers, electronic products and parts, furniture, pport tools and accessories.

Many of these products overlap with China's exports.