Geography IGCSE - Vietnam TNCs

Vietnam location

located on the Indochina peninsula in Southeast Asia

Nike’s presence in Vietnam

Over 130 Nike contracted factories nationwide → concentrated in south near Ho Chi Minh City

Amount of workers employed in Nike

Over 500,000 workers

BP1 (Location)

South Vietnam has major deep water ports → e.g. Cai Mep–Thi Vai → allows large cargo ships to dock easily → Port of Saigon is one of largest in region → makes global shipping faster + cheaper → land is flat → ideal for building large scale factories + transport links → reduces construction + distribution cost

BP2 (Location)

Southern Vietnam has large, low-cost labour force → strong experience in textile + garment production → over 1.5 million workers employed in footwear + textile industries → wages are much lower than in HICs → e.g. $300/month in Vietnam vs. $2,000 in US → helps Nike keep costs low while maintaining high output → labour laws are less strict → region has good infrastructure → e.g. road links, export access to Asian markets → allows fast + efficient production + distribution

BP3 (Location)

Vietnam’s government offers Free Trade Zones (FTZs) + tax incentives → encourages foreign companies to invest → vietnam joined World Trade Organization (WTO) in 2007 → opened up economy to global trade → pro - business policies + low regulation→ easier + cheaper for Nike to operate → boosts Vietnam’s appeal as manufacturing hub

BP1 (benefits + problems)

In 2024, Nike’s presence contributed to 7.1% of Vietnam’s total GDP growth → foreign direct investment from Nike + related TNCs totalled $17 billion USD in first 9 months of 2024 → fuels growth in supporting industries → e.g. logistics, packaging + raw materials → tax revenue from TNCs supports infrastructure + education → creates a multiplier effect → stimulates wider economic development across urban hubs

BP2 (benefits + problems)

Nike factories have faced criticism for low wages → as little as $1/hour, long hours + poor working conditions → reports of verbal abuse + unsafe environments in some contracted factories near Ho Chi Minh City → e.g. Hansae factory → limits workers’ rights + harms quality of life → especially for young, unskilled workers

BP3 (benefits + problems)

Mass manufacturing → contributes to air + water pollution → e.g. in 2017, a Nike supplier in Vietnam was reported to have released untreated dye waste into local water systems → harms nearby farming communities + biodiversity around Dong Nai River