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This was my second visit to Vietnam; my first trip a few years ago was to Hanoi. This time, I spent several days in Ho Chi Minh City (Saigon) exploring its industrial outskirts, visiting a cabinet manufacturing plant about 40 miles outside the city, and evaluating whether Vietnam can truly serve as the next major alternative to China for manufacturing and sourcing.

First Impressions

Ho Chi Minh City feels alive in every sense, noisy, chaotic, and pulsing with energy. Millions of motorcycles move like schools of fish through narrow streets. Street vendors, cafés, and small shops line every block. The people are friendly, curious, and ambitious, and many speak some English or at least understand a few key phrases. It is common to meet someone with relatives in the United States, especially in California. Compared to Hanoi, Saigon feels less organized but more entrepreneurial, younger, scrappier, and buzzing with a sense of possibility.

Purpose of the Trip

My goal was twofold: first, to visit a cabinet manufacturing facility and evaluate its capacity, export readiness, and consistency; and second, to explore the feasibility of shifting more manufacturing from China to Vietnam, especially for categories like home improvement, consumer products, and light industrial goods.

The Manufacturing Reality

Vietnam’s manufacturing evolution is real but uneven. Labor costs are roughly one third of China’s, but overall manufacturing expenses can be ten to thirty percent higher once you factor in logistics, capital amortization, skill transfer, and labor law enforcement. There are few expressways, and constant stoplights make travel time tiring. New factories, machinery, and land carry higher upfront and financing costs. Many Chinese companies relocating to Vietnam bring their own technical teams to train local staff, adding cost and complexity. Overtime is paid at 1.5 times during weekdays and 3 times on weekends, and these rules are strictly enforced. Ironically, with the sum of all these extra costs, this means that in some cases it is still cheaper to source from China and pay the tariffs than to manufacture in Vietnam.

The People Behind the Factories

Vietnamese workers are eager, disciplined, and hardworking, but the conditions can be challenging. In the factory I visited, shifts stretched up to 12 hours in hot, humid, and noisy environments without proper protective gear. Most workers come from rural mountain regions bordering Laos and Cambodia. They rent small, bare rooms near the factory, often just large enough for a mat, paying about $90 a month. The bulk of their earnings is sent home to support their families.

Infrastructure and the New Industrial Boom

Factories are appearing across the outskirts of Saigon. Much of the investment comes from Chinese manufacturers relocating to avoid tariffs and diversify risk. Vietnamese landowners benefit by leasing or selling land at strong returns, often becoming quietly wealthy in the process, creating a visible wealth gap between landowners and the common citizen. Despite rapid growth, Vietnam still lacks the scale and integration that define China’s manufacturing power. In many ways, it feels like China of 30 to 40 years ago, full of momentum but still reliant on foreign direct investment and imported expertise.

Economic Outlook

Vietnam’s population is 98 million, with a reported unemployment rate of 2.5%. The government has set an ambitious 8% GDP growth target for 2025, powered by manufacturing, exports, and foreign investment. While China wrestles with deflation, Vietnam is dealing with inflation and currency debasement, the price of rapid growth and aggressive expansion. U.S. tariffs on Chinese goods have clearly accelerated Vietnam’s industrial rise, positioning it as one of the fastest growing economies in Asia and a likely middle income nation within the decade.

Interesting Tidbits I Learned During the Trip

The Mekong Delta, or Cuu Long (meaning River of Nine Dragons) is among the most fertile regions in Asia. Its soil is enriched by minerals flowing downstream from the Himalayas, making it ideal for rice and fruit cultivation. Vietnam is the world’s top exporter of cashews and one of the largest rice exporters, producing the celebrated ST25 rice, known for being shorter and juicier than Indian varieties. The country is also the second largest exporter of Arabica coffee, a crop introduced by the French, along with rubber and cashew trees. 

You will still see the hammer and sickle everywhere, on buildings, flags, and light poles, but capitalism is thriving in every alleyway and market stall. 

The War Remnants Museum is deeply emotional yet surprisingly objective. The horrors are displayed without bitterness; people have moved on, focused on building better lives and stronger ties with the West.

My takeaways

When it comes to manufacturing in Vietnam, additional attention and resources are needed for raw material inspection and final quality control. The total landed cost for items not under anti dumping tariffs could still be cheaper in China if carefully planned, especially when Chinese made products deliver better quality. However, with risks also come opportunities. Vietnam offers a chance to develop a secondary supply chain that runs parallel to China, with the understanding that over time, quality will improve and costs will reach parity with Chinese manufacturing.

Final Thoughts

Is Vietnam the next China? Perhaps, but not in scale. With a population the size of a single Chinese province, it will never replicate China’s industrial depth or domestic market. Yet its growth feels inevitable, fueled by youthful energy, foreign investment, and a hunger for progress. Vietnam’s challenge will be to grow fast without losing balance, managing inflation, infrastructure, and inequality while maintaining social cohesion. Still, walking through the streets of Saigon and watching its people work tirelessly, it is hard not to feel that the country’s ascent is unstoppable, one step at a time.