Foreign firm exodus from China to Vietnam may be delayed

A Standard Chartered Bank study highlighted the fact that increasingly-competitive Vietnam is now the “best choice” for China-based investors who want to relocate their production base. But the exodus may be delayed by Vietnam’s restrictions on imports of used machinery and equipment.

The research was conducted between February and March 2015, with more than 290 responses from manufacturers operating in China’s Pearl River Delta (PRD), which includes nine cities in Guangdong province.

As a notable indicator of the production exodus from China, Microsoft has shut down its two Nokia mobile phone making plants there in favor of a new location in Vietnam. It will expand its existing $200 million mobile phone factory in Bac Ninh province’s Vietnam-Singapore Industrial Park, and will triple its employees from 5,000 to 15,000 in the near future.

However, Vietnam’s restrictions on imports of used machinery and equipment are expected to delay the FDI.

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Businesses protest Vietnam’s plan to curb import of used machinery, Mar 17, 2015
Request for comments regarding revised circular to replace Circular 20, Imports of Used Machinery, Equipment, and Production Lines
Comment from AmCham Customs & Trade Facilitation Committee, Mar 17, 2014
Quyết định ngưng hiệu lực thi hành Thông tư số 20/2014/TT-BKHCN ngày 15 tháng 7 năm 2014 của Bộ Khoa học và Công nghệ quy định việc nhập khẩu máy móc, thiết bị, dây chuyền công nghệ đã qua sử dụngQuyết định số 2279/QĐ-BKHCN 29/8/2014
Circular 20/2014/TT-BKHCN, Hanoi, 15 July 2014, Regulations for used machinery, equipment and technological line imports. Effective 1 Sep 2014. 
Japanese SMEs shaken by ban on used machinery imports, Mar 1, 2014
Ministry tightens regulations for import of used equipment
Restrictions on used equipment imports delays shift of production from China to Vietnam
Microsoft seeks gov’t approval to bring used equipment to nokia plant in Vietnam 
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