Vietnam's IT rise could leave Thailand standing

Post by **buksida** » Wed Nov 29, 2006 1:02 pm

Intel's recent decision to invest US$1 billion in Vietnam was a clear signal that the country's information technology industry is taking off, potentially leaving other Southeast Asian countries in its wake. Vietnam's advantages include younger, tech-savvy workers, rapidly improving infrastructure and, of course, lower wages.

With new foreign investments pouring in and more than 600 software-oriented firms already in place, Vietnam's information-technology sector is by all measures going great guns. And recent big-ticket investments from the multinational likes of Intel and Canon could soon establish Vietnam as a low-cost IT leader in the region, challenging the positions of such countries as Thailand and the Philippines.

US technology giant Intel this month announced plans to boost its investment in Vietnam to US$1 billion, a mere nine months after the company unveiled plans to spend $300 million on a factory to assemble and test microchips in Ho Chi Minh City. Canon is meanwhile spending $1 billion on a new printer factory in Hanoi, while Alcatel, Fujitsu and Siemens are all increasingly sticking "Made in Vietnam" on their products.

...

Vietnamese firms have importantly placed a premium on innovation, spending 1.42% of their sales on research and development, compared with just 0.15% by Thai IT firms and against a regional average of 1.24%, according to a recent International Finance Corp survey. Meanwhile, firms in Vietnam report waiting on average 17.57 days for electricity to be connected to new facilities, against a 23.64-day wait in Thailand. A main telephone line, meanwhile, is connected on average in 8.83 days in Vietnam, compared with a regional average of 9.32 days and 15.52 days in Thailand, according to the same survey.

Vietnam is rapidly plugging in its economy, in some areas faster than regional neighbors such as Thailand. More than 13.7 million Vietnamese, or 16.5% of the population, now regularly use the Internet, of whom 3.8 million surfers are regular subscribers, according to information compiled by the Vietnam Internet Network Information Center. That total figure has skyrocketed from 8.1 million in September 2005. In comparison, Thailand's National Electronics and Computer Technology Center reckoned 7.08 million people, or 8.75% of the population, were using the Internet as of last November.

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Full Story: Asia Times Online

Interesting article, with Thailand's xenophobic attitude and backwards technology this is probably a trend that is set to increase with other industries too.

Post by **Jockey** » Wed Nov 29, 2006 2:02 pm

Agree with you Buksida. I just got back from Vietnam. I could help but be amazed that the population seems to be nearly all under 30! The Vietnamese are obsessed with education and it would be an obvious choice for forward thinking IT business's to invest in this country. Would'nt like to live there though and I'm not sure that 'progression' is a good thing anyway! The more Thailand stays as it is the more happy I will be. Its why I escaped from the west!

Post by **Bamboo Grove** » Wed Nov 29, 2006 5:25 pm

Both the Chinese and Vietnamese really see the value of education. A thing which the Thais unfortunately seem to undervalue.

Post by **Rider** » Fri Dec 01, 2006 3:45 pm

If the thais want to have their fiercely 'keep out foreign business' investment mentality then this is the price they will pay! Intel have a made a show of strength in the Asia pacific zone by doing this and it will be galling to thailand which always sees itself as a leading contender in the region.
It may yet prove to be a slap in the face that shakes them about a bit from this xenephobic web they are stuck in.

Post by **Jockey** » Fri Dec 01, 2006 5:38 pm

Rider wrote:If the thais want to have their fiercely 'keep out foreign business' investment mentality then this is the price they will pay! Intel have a made a show of strength in the Asia pacific zone by doing this and it will be galling to thailand which always sees itself as a leading contender in the region.
It may yet prove to be a slap in the face that shakes them about a bit from this xenephobic web they are stuck in.

Sorry - can not agree with this - if you compare China & Vietnam with Thailand you will find Thailand is far more ameniable to foreign business and foreign 'settlers' than either communist countries!

Post by **Rider** » Fri Dec 01, 2006 7:14 pm

Jockey wrote:
Rider wrote:If the thais want to have their fiercely 'keep out foreign business' investment mentality then this is the price they will pay! Intel have a made a show of strength in the Asia pacific zone by doing this and it will be galling to thailand which always sees itself as a leading contender in the region.
It may yet prove to be a slap in the face that shakes them about a bit from this xenephobic web they are stuck in.
Sorry - can not agree with this - if you compare China & Vietnam with Thailand you will find Thailand is far more ameniable to foreign business and foreign 'settlers' than either communist countries!

Well we'll agree to differ on this one Jockey!

Both of those countries (China and Vietnam) seem to be getting the lucrative big business deals/investment and Thailand isn't. Chinas expanding big time and wants the investment.
Two buddies of mine just came back from China didn't have any problems, ones an energy invester, the others a long time expat. Another has runs a machine tools factory in HCM city (Saigon) since the early 1980s (when its supposedly 'dangerous'), he's never had any problems with the Authorities either.
I rest my case.

Post by **Jockey** » Fri Dec 01, 2006 9:02 pm

All 3 countries are very happy to take investment from rich foreign people, however, for Mr Joe Bloggs, Thailand is MUCH more ameniable. You can not own a condo in China & Vietnam and as far as I'm aware you can not obtain a retirement visa either. The Chinese secret police watch your every move - even if you are a tourist. I am talking about the many ordinary typical expats who live here in Thailand. It would be much more difficult to etch out a living in China & Vietnam than here. The only way to live in the communist countries is if you are rich, employed by a big western company or have rare skills which they need. Accommodation is very expensive in these two communist countries and you are not allowed to go native i.e. live with the peasants. If you try that you'll be thrown out the country. Cars are twice the price of that in the UK. I rest my case!

sargeant · Post by **sargeant** » Fri Dec 01, 2006 10:11 pm

Forgive me for being a little naive but isnt the averae wage in vietnam and china about a quarter of the thai wages

Didnt we have political strikes not long ago which they dont have under pain of death in the above 2 countries

am i missing something or is my maths greed and exploitation by big companys equation now obsolete

Post by **PeteC** » Fri Dec 01, 2006 10:37 pm

sargeant wrote:Forgive me for being a little naive but isnt the averae wage in vietnam and china about a quarter of the thai wages

I can speak for China only in that an engineer with a China university degree will start out at about the equiv of 15,000 baht a month with approximately a 2 month salary bonus at Chinese New Year time.

Within 3-5 years, he'll be at about 36,000 Baht a month, plus bonus. 10 years about 54,000. Then if he gets to supervisory level, about 65,000 per month. This is a small company with revenue generated from non- China sources. Larger corporations in China with foreign influence pay more. There is a big difference concerning the 'foreign influence' factor, and companies without.

I don't think the above is too much different in comparison to Thai wages here in Thailand for the educated.

There is a grim side as well, as the uneducated in China do indeed make less than the uneducated here in Thailand. The 'less' is significant also, in terms of people affected, as the head count in China earning these low wages is probably about 15 to 1 in comparison to Thailand. Fodder for revolution for sure, if they ever get organized, and as Sarge put it, it's tough to get 'organized' there as or with any kind of a union. Maybe in time. Pete

Post by **Rider** » Fri Dec 01, 2006 10:47 pm

Depends where you live in China Jockey there are places that are cheap and places that aren't. Shanghai is reputed to be as cheap as Bangkok and some guys from work actually live their in their 3 weeks off its that cheap.

A guy from work I know lives and travels freely around the highlands (of China) and lives in a tent or with the villagers there and the Authorities couldn't give a damn what he does. So its not as clear cut as you think.
I actually asked him how he got to travel so freely he explained that as long as your patient at the check-points your allowed through them! Its just a game to be played. As long as you don't pose a threat to their 'thing' its cool for cats man!

Also you'll find that expats get watched here in Thailand, its just not as overt or serious as Vietnam / China. Example include the internet and information sent to immigration police.

The wages aren't clear cut either, at least not according to the undermentioned.

Vietnam:

GDP - per capita (PPP):
Definition Field Listing Rank Order
$8,600 (2005 est.)

Thailand:

GDP - per capita (PPP):
Definition Field Listing Rank Order
$8,600 (2005 est.)