The global economy’s center of gravity is shifting. For years, multinational companies clustered production where it was cheapest, fastest and biggest, with China at the core. After U.S.-China tensions intensified, that model began to wobble. Companies increasingly face a different question: not where to depend, but how to spread risk.
That approach is often called the “China plus one” strategy — splitting production bases and dividing exposure. Yet it has produced a paradox: while companies talk about diversification, they also concentrate heavily in a new place. A clear example is Cho Hyun-joon and Hyosung Group’s expansion in Vietnam.
Since entering Vietnam in 2007, Hyosung has invested $5 billion, built nine local units and hired 10,000 workers. It has developed a production chain spanning spandex, tire cord, polypropylene and electric motors. With newer investments in advanced sectors such as bio-butanediol and high-voltage motors, cumulative investment is nearing $6 billion. On its face, that looks less like diversification than concentration.
The explanation is that companies diversify one thing and concentrate another. What they seek to diversify is country risk — reducing heavy dependence on a single nation, especially China. What they concentrate is function. Building a cluster that combines production, logistics, labor and technology often requires focus.
In today’s supply chains, the pattern is increasingly: diversify globally, concentrate regionally.
Hyosung’s Vietnam strategy fits that structure. As it moves away from a China-centered axis, it has consolidated production functions around Vietnam. The shift is not simply relocating factories; it is building a new pillar of its supply chain — closer to a redesign than a transfer.
That redesign is reflected in what Hyosung makes there. Vietnam was long seen mainly as a low-wage manufacturing base, but Hyosung’s portfolio goes beyond basic labor-intensive work. Spandex requires stable, high-precision processes, and tire cord is tied directly to global automaker supply chains. With chemicals such as polypropylene and PDH, and with electric motors, Vietnam functions as a production hub rather than a single factory site.
As industries become more advanced, research and technical infrastructure matter more. Why, then, does Vietnam remain the stage for expansion?
The answer again lies in separating functions. Even in advanced industries, not every step must happen in one place. Research and development can be done in South Korea or other advanced economies, while manufacturing is carried out at efficient bases. Vietnam is positioned for production, combining established infrastructure, accumulated labor capacity, a stable policy environment and multiple free trade agreements that support exports.
The core issue is structure, not technology. Technology can move; the environment that makes it work is harder to replicate. What Hyosung has built in Vietnam is not just know-how, but the conditions for that know-how to operate — making the base difficult to replace quickly.
The company’s role, the column argues, now extends beyond economics. It cites Hyosung Chairman Cho’s participation as part of an economic delegation accompanying President Lee Jae-myung on a Vietnam trip. In the past, diplomacy was led by governments: states signed agreements and companies followed. Now, the sequence is often reversed, with companies entering first to build relationships and governments layering cooperation on top.
That does not mean business becomes diplomacy. Companies pursue profit. But the networks they create can serve as leverage for state-to-state cooperation. Trust with local authorities, industrial infrastructure, and ties built through jobs and investment can provide a practical foundation for bilateral collaboration.
Hyosung’s Vietnam footprint illustrates that leverage, the column says. Its production base and local network have become a tangible link between South Korea and Vietnam — a relationship built through long-term investment rather than a single visit.
The structure is not risk-free. Concentration in one country can bring exposure to political change, labor conditions and swings in global demand. With cumulative investment nearing $6 billion and key production functions clustered in Vietnam, the burden is real.
Still, the column argues the risk should not be viewed only as something to endure. Global companies increasingly pair concentration with contingency plans: spreading parts of production to other countries, diversifying suppliers, and keeping core technology and decision-making at home. The result is a flexible structure — neither fully dispersed nor fully concentrated.
Hyosung, it says, is centered on Vietnam while leaving room to expand elsewhere. The key is not a fixed answer but a design that can respond to change. Supply-chain competitiveness comes from architecture, not just location.
The column concludes that Cho’s Vietnam strategy raises a broader question: where should a company put down roots, and what kind of structure should it build from those roots? In global competition, it argues, outcomes are no longer decided by the number of factories, but by how companies connect operations, allocate functions and share risk.
* This article has been translated by AI.
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