Vietnam vs China: Complete Cost Comparison Guide (2025)

If you’re weighing up Vietnam against China for 2025, don’t just compare hourly rates. The right choice comes from a proper total landed cost view: parts and materials, labour, MOQs, tooling, yields, freight, duties, compliance, cash flow, and risk. That’s where we operate best — joining up the moving parts from product development through to quality control and shipping so you see the real picture, not just the quote.

We’re on the ground in Guangzhou and work daily with suppliers across Vietnam. Below is a practical framework you can use before you commit to a factory, along with scenarios that show when Vietnam wins, when China still leads, and when a hybrid route is smarter than picking one country.

Start with total landed cost, not unit price

When we compare suppliers for clients, we map every cost line, then test the risks around each. Use this checklist:

Direct costs

Bill of materials and components
Direct labour and overheads
Tooling and NRE (moulds, dies, jigs, programming)
Packaging and compliance testing

Order economics

MOQs by colour/style and by component
Yield, defect, and rework rates
Lead time and order-to-cash cycle

Movement and compliance

Freight mode and route (air vs sea), insurance, port fees
Duties, taxes and Incoterms responsibilities
Certification and market access

Risk and finance

Currency, prepayments and working capital timing
Expsure to tariffs or rule changes
Supplier reliability and capacity

Useful refreshers:

Quick snapshot: where each country tends to win

Cost Driver	Vietnam often wins on…	China still leads on…
Labour & MOQs	Lower labour in labour-intensive lines, friendlier MOQs in apparel, footwear, furniture	Complex builds with high automation, tight takt time
Tooling & Engineering	Simple tooling, basic jigs	Fast DFM, prototyping, complex moulds, in-house engineering
Components & Materials	Apparel, footwear, wood, basic plastics	Dense component ecosystems, electronics, precision metal
Lead Time Reliability	Less congestion in some corridors	Scale, depth of alternates when one supplier slips
Duties & Trade	FTA advantages for many SKUs into AU/EU/US	Heavier tariff exposure into the US on certain HS codes
Scale Up	Medium volumes and staged ramps	Very large volumes, multi-SKU rollouts
IP & Compliance	Growing compliance capability	Mature testing, certifications and documentation pathways

Generalised view. Always validate at HS-code and product level.

Cost line items, side by side

Labour, MOQs and throughput

Vietnam’s advantage shows in labour-heavy steps: cutting, stitching, finishing, hand assembly, simple pack-out. You’ll often see friendlier MOQs, which helps new ranges and tighter cash flow.

China’s gain tends to be throughput: automation, line balancing, and multi-shift capacity that compresses real unit cost at scale.

Helpful read: Guide to Minimum Order Quantities

Tooling, DFM and prototyping

For complex plastics, die-cast metals, tight-tolerance assemblies, China usually delivers faster DFM feedback and more competitive tooling at quality. Vietnam is fine for simple tools. If you need design support, China’s depth can reduce delay risk.

Explore: Product Sourcing & Manufacturing

Components and materials access

China’s supplier density still sets the pace, especially in electronics, connectors, fasteners, coatings, and specialty resins. Vietnam is strong in textiles, footwear components, wood, and basic plastics. Many Vietnam builds still import inputs from China, which affects lead time and duty math.

If you’re new to agents, read: How to Find a Trustworthy Sourcing Agent and Agents in China

Quality, yield and the true cost of rework

The cheapest quote becomes expensive quickly if yields slip. We budget for first-pass yield, rework time, return freight on defective batches, and inspection time. China’s long experience in QC for complex builds remains an edge; Vietnam performs strongly in categories where it has deep experience.

See: 8 Common Supplier Problems (and fixes)

Freight and logistics

Transit times from both countries to Australia, NZ, US and EU are comparable by mode and route, though carrier options and cut-off frequency are wider out of major Chinese ports. Vietnam’s port congestion is generally improving. Mode choice (air for launches, sea for scale) often swings the final cost.

Compare: Air Freight vs. Sea Freight and Shipping & Logistics

Duties, tariffs and Incoterms

This is the swing factor in 2025. Some China-origin goods still attract additional duties into the US, while Vietnam origin can benefit from FTAs into Australia, the EU and CPTPP markets. Get the HS code right, check rules of origin, and model landed cost under your chosen Incoterms.

Start here: Calculating Duties & Taxes and Incoterms Guide

Three practical scenarios (illustrative)

Numbers below are directional, not quotes. We’ll validate your HS codes, BOM and logistics plan before committing.

Scenario A: Knit apparel, 10,000 units, AU and EU markets

Vietnam often wins on sewing labour and enjoys tariff advantages into AU/EU.
Fabric is frequently imported from China; plan early for fabric lead time.
Result: Vietnam tends to land cheaper overall, with the caveat that fabric supply controls your schedule.

Scenario B: Phone accessories, 30,000 units, US market

BOM is dominated by electronic components and precision plastics.
China usually offers cheaper, faster tooling and secure component pipelines.
US tariffs on China origin can sting. A hybrid often wins: components in China, final assembly in Vietnam if rules of origin allow.
Result: Tie or hybrid. Run the tariff math by HS code and confirm origin rules before you lock the plan.

Scenario C: Flat-pack furniture, 2,500 sets, AU market

Vietnam has strong capacity in wood, veneers, and upholstery.
Fewer tariff headwinds, competitive finishing quality, good medium-volume economics.
Result: Vietnam typically lands better overall, assuming your packaging survives a drop test and you plan QC at pre-pack.

If you need a hand with the modelling, we can build a simple landed-cost view that mirrors your Incoterms, duty rates and freight plan.

When Vietnam is the better economic choice

Labour-intensive SKUs with low-to-medium complexity
Apparel, footwear, furniture, textiles, basic plastic goods
Western markets where origin Vietnam reduces duty exposure
Programmes that ramp in stages with conservative MOQs

When China still delivers the best total cost

Complex builds with precision tooling, tight tolerances, or many sub-assemblies
High volumes where automation and supplier density cut real unit cost
Fast prototyping or frequent design iteration
BOMs dominated by China-sourced components

When a hybrid approach beats both

Components sourced in China, final assembly or finishing in Vietnam
Assembly in Vietnam to qualify for origin, while maintaining China’s component pipeline
Risk split across two countries for continuity and leverage

If you’re planning a hybrid route, lock down rules of origin early and agree on documentation. A small misstep can change duty exposure entirely.

Risks to price in before you choose

Tariff volatility: model sensitivities for your top markets.
Supplier depth: do you have alternates if a line goes down.
Cash flow: deposit terms, batch sizes, and sea lead times drive working capital.
IP and tooling control: specify custody, access, and storage from day one.
Change management: who owns DFM and ECOs, and how they are costed.

For broader strategy thinking, read Smart Supply Chain Diversification and Nearshoring in Asia. If you’re already shifting footprint, this explainer helps: Moving from China to Vietnam.

How The Sourcing Co makes the numbers work in your favour

We combine product development, factory selection, quality control, and logistics into one accountable workflow. That means you get a clean comparison, a realistic timeline, and a single owner for outcomes.]

One team, not five vendors.
On-the-ground QC with clear yield targets and pre-shipment checks.
Freight planning that matches your cash cycle, not just port schedules.
Transparent cost models you can defend to finance.

Explore our capabilities:

A simple decision checklist

Confirm HS codes and target markets.
Map BOM to country availability for each key component.
Choose likely Incoterms and model duties, taxes and fees.
Compare MOQs and batch sizes against cash flow.
Validate tooling, DFM and prototyping timelines.
Set required yields and QC plan, including rework path.
Pick freight mode by launch vs scale.
Stress-test the plan with tariff, delay and currency scenarios.
Confirm documentation for rules of origin.
Book a pre-production pilot and lock the ramp plan.

When you’re ready, send your spec and target volumes. We’ll build a side-by-side landed-cost comparison and line up suitable factories in both countries.

Email: info@thesourcing.co
Talk to us: Contact our head office