Global Companies Turning to Other Countries Amid Vietnam Lockdown

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Cho Hyun-ui] Global companies operating in Vietnam have warned that strict government lockdown orders are causing businesses to look to other countries.

According to a British economic media outlet on the 24th, a coalition of foreign companies including the American, European, and Korean Chambers of Commerce in Vietnam recently sent a written request to Prime Minister Pham Minh Chinh demanding "a clear quarantine roadmap and a timeline for resuming production." In fact, at least 20% of the companies in this coalition have already started production in other countries.

Vietnam, Southeast Asia's largest export hub, implemented stringent quarantine measures such as intercity travel restrictions and prohibiting factory workers from commuting after a surge in COVID-19 cases caused by the Delta variant in June and July. Although some measures have been eased in Ho Chi Minh City, the lockdown remains in effect.

Labor-intensive industries have been particularly hard hit. Companies such as Intel, Toyota, IKEA, Nike, and Adidas have experienced supply disruptions originating from Vietnam.

Another issue cited was that foreign professionals must undergo facility quarantine even if they have completed vaccination before entering the country. Adam Sitkoff, Executive Director of the American Chamber of Commerce in Vietnam, pointed out, "Measures designed to prevent infections from overseas arrivals are causing significant damage," adding, "The fact that most related measures are announced just before implementation and frequently change is also problematic."

The coalition stated, "The longer the lockdown continues, the more investment opportunities will be lost," and warned, "If Vietnam fails to prove itself as a reliable alternative, it will inevitably fall behind in the trend of diversifying supply chains away from China."

This content was produced with the assistance of AI translation services.