Apple’s Shifting Supply Chain Creates Boomtowns in Rural Vietnam

Apple’s Shifting Supply Chain Creates Boomtowns in Rural Vietnam

Not long ago Vietnam’s Bac Giang province was one of the nation’s poorest regions, known for producing rice, lychees and poultry dubbed “running chicken.” That was before the global tech supply chain shifted its way.

Now officials in the rural area north of Hanoi host representatives from Apple Inc. and Hon Hai Precision Industry Co. The growth in foreign investment is almost doubling every year — even during the coronavirus pandemic — and the province forecasts the value of exports this year will reach $11 billion, a tenfold leap in six years. Residents have swapped loud, dirty motorbikes for new Honda two-wheelers while others drive Toyota SUVs and Mercedes sedans on freshly paved roads.

“Life is heaven now and it’s thanks to the factories,” said Nguyen Van Lanh, 64. His family, which once couldn’t afford to buy meat, runs boarding rooms for workers built with their factory salary savings. One relative with a loan business for plant employees drives a red Mercedes-Benz.

The boom in Bac Giang highlights how the shift in the world’s supply chains is touching regions previously left behind. Vietnam’s ability to attract more sophisticated manufacturing is accelerating with rising Chinese labor costs, the U.S.-China trade war and logistics vulnerabilities amid the epidemic, which the nation’s Communist leaders have so far successfully curtailed.