Asia is the fastest-growing region in the world, and as a result, new developments are taking place in the region. In this write-up, we will talk about the top news from Asia.
Korean Firm Faces Growing Competition From China In Vietnam
Many South Korean companies, like Samsung and LG, to name a few, have been operating in Vietnam for a long time now and account for most of Vietnam’s FDR. This has made South Asian countries a vital part of the global supply chain. However, South Korean companies are now facing tough competition from their Chinese peers. This was made clear by the representative of the Korea Chamber of Commerce and Industry in the country, Kim Hyong-Mo.
Vietnam is considered one of the best countries in the world to invest in due to its low labour costs and stable politics. However, as Chinese companies expand their regional investments, labour costs have increased by 6%. This creates a problem for other companies that rely on low labour costs for their operations. Moreover, the growing similarities in the ideology of both governments mean Vietnam can provide some benefits to Chinese companies. Kim said that if this continues, more and more companies will start looking for new regions to invest in and set up manufacturing plants. He stated that India is also an option they are looking at. This is also good for India as more and more companies and countries, like the Israeli semiconductor manufacturing company Tower, are increasing their investments in India.
East Asia Outpacing The Rest of The World: World Bank
According to a report by the World Bank, East Asia is seen as the fastest-growing region in the world. The chief economist of the World Bank in East Asia and Pacific, Aditya Mattoo, stated that, “It is a region that is still outperforming the rest of the world, but it is underachieving relative to its own potential.”
According to Aditya, headwinds in China and broader policy uncertainty have slowed growth in East Asia. The report stated that the region’s growth reached around 5.1% last year and is now expected to go down to 4.5% this year. However, the report also stated that if we exclude China, the region can grow at a rate of 4.6%, which is more than the previous year’s 4.1%.
China accounts for a lot of business in the region, and its protectionism policies with Vietnam, Indonesia, and other South Asian nations have stopped East Asia from reaching its full potential.
