On the evening of November 8, Yongyi announced that it would build an office furniture production base in Vietnam. On the evening of November 23, Mecca announced that it plans to increase the capital of three companies in Vietnam. In addition, Minhua, Henglin and other furniture enterprises have also built factories in Vietnam.

The coincidental actions of large enterprises make more enterprises realize that building factories in Vietnam may be another major trend at present.

However, in the face of increasingly treacherous Sino US trade relations, the transfer of furniture factories to Vietnam may not only reduce costs.

Although the advantages of building factories in Vietnam are decreasing, Vietnam is still the next direction for many furniture factories.

As early as 2013, a home furnishing company invested to establish a 450 Mu raw material production base in Vietnam to participate in the global home furnishing industry chain competition. Since then, furniture enterprises have successively gone to Vietnam.

This year, Minhua group is engaged in the production and export of sofa in June 2018. The construction commencement ceremony of the new plant project was held on October 9, and the plant is expected to be put into operation in the fourth quarter of 2019.

On November 8, Yongyi announced that it plans to invest 9.5 million US dollars to build an office furniture production base in Vietnam. The announcement said that one move to respond one belt, one road, and to speed up the layout of globalization, while effectively avoiding trade barriers.

On the 23rd of the same month, Merck home announced that it plans to increase the capital of three companies in Vietnam, with a transaction value of about 181 million yuan. According to the announcement, this is to improve the global allocation of supply chain, coordinate and optimize production capacity, and make southeast Asia the main source of supply for the North American market.

On the evening of the 26th of the same month, Henglin announced that it plans to set up a wholly-owned subsidiary in Vietnam with us $48 million to build a manufacturing base for office and civil furniture in Vietnam. The announcement said that one belt, one road and one strategic direction, is conducive to avoiding the risk of trade friction and fully developing the international market.

Why furniture enterprises choose Vietnam to build factories? The advantages are obvious:

The first is the cost of employment in Vietnam. Although Vietnam's wage level has increased significantly in recent years, according to a report in Vietnam in July, as of the first half of 2018, the average monthly wage of Vietnamese workers was US $240, equivalent to less than RMB 1700, even lower than the minimum wage line in many provinces and cities in China.

Other costs are also relatively low: Vietnam's industrial power consumption is about 0.45 yuan / kWh, half of that in China. The purchase cost of industrial land is relatively low.

One belt, one road policy, has laid a broad road for enterprises to build factories in Vietnam. Vietnam has always had favorable policies for foreign-funded enterprises. Foreign investors can enjoy the tax preference of "two exemptions and four halves" for investment projects in Vietnam. In the first two years, the enterprise income tax will be exempted, and in the next four years, the tax will be halved.

In the face of domestic labor shortage, recruitment difficulties, higher recruitment costs, environmental pressure, rent and other headache problems, it is a good plan to transfer to Vietnam.

For foreign trade enterprises and furniture enterprises whose export accounts for a relatively heavy proportion, going to Vietnam is of more important significance.

Trade friction between China and the United States makes many furniture enterprises have a hard time. In 2017, China exported 13.6 billion US dollars of wood furniture, of which 5.288 billion was exported to the United States. Taking foreign trade enterprises as an example, the data shows that the net profit of many foreign trade enterprises has declined this year, such as Henglin, with a net profit of 57 million yuan in the first half of the year, a negative growth of 45.47% year on year. Moreover, the net profit of enterprises is negative.

The trade friction also directly affects the layout of some furniture enterprises in the international market.

Enterprises through Vietnam, on the one hand, can reduce costs, on the other hand, can reasonably avoid the risk of trade friction. At present, Vietnam has signed 12 free trade agreements, and the free trade agreement signed with the European Union is expected to come into force in 2019. This means that Vietnam will become a stepping stone for many furniture enterprises to get through the international market.