I wonder: Why not cut out the middleman and buy directly from Vietnam?

Inefficiency -- (c) Per Jacobsen, 2013. All rights reserved

Inefficiency — (c) Per Jacobsen, 2013. All rights reserved

First the Indians got taken by the Chinese, watching helplessly as the Western world shifted its manufacturing outsourcing nexus from India to China, yielding to the relentless pressure of cheaper-is-better economics.

Determined not to let the same thing happen to themselves, the Chinese have stealthily been outsourcing to Vietnam.

This movement has now gathered so much momentum that it is starting to manifest itself in retail stores around you.

And, so, now when you buy goods, say furniture, from your local merchant, they are increasingly labeled “Made in Vietnam,” but they are still sourced from China (although, of course, in this hyper-effective world, they are drop-shipped from Vietnam to the merchant.)

Seems pretty inefficient to me.

Which makes me wonder… Why don’t we just eliminate the middle man, buying direct from Vietnam? Do we really need to support the Chinese economy any further?

If nothing else, it would be interesting to see how far the Chinese would go to protect their interests. The Indians, of course, responded by initiating a mad scramble up the value chain, spitting out IT workers at a relentless pace, so will China follow this path, going head-to-head with India in outsourced IT?

Also, from a geo-political standpoint, lifting Vietnam to the level of an economic super-power, the same way that we did with China, seems like a smart move, potentially creating a stabilizing influence.

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