The reason for the move south is straightforward: Vietnamese factory workers make about a quarter of what their Chinese counterparts earn.
But why Vietnam and not, say, Thailand, where labor is similarly cheap?
Vietnam's edge, it seems, is political. "Communism means more stability," Laurence Shu, the chief financial officer of Shanghai-based Texhong, one of the world's leading manufacturers of cotton fabrics, told Bradsher. This view, Bradsher reports, is common among Asian executives and some American executives, too, though they have the presence of mind never to say so on the record. After all, Vietnam, like China, outlaws independent unions. Absent free speech and free elections, no radical shifts in the government's economic policies are likely to be sprung upon unsuspecting American businesses.
Now, far be it from me to begrudge the Vietnamese their moment in the sun before global capital finds them too costly and moves on to Bangladesh and Somalia. But didn't we fight a war to keep Vietnam from going communist? Something like 58,000 American deaths, right? And now American business actually prefers investing in communist Vietnam over, say, the more or less democratic Philippines? In all likelihood, it would prefer investing in communist Vietnam to investing in a more chaotic, less disciplined democratic Vietnam, if such existed.