Japanese companies that built plants in Vietnam to capitalize on its lowly paid workforce are finding the country is no longer such a cheap and abundant source of labor.
Wages have risen steeply in Vietnam in line with the country's rapid economic development, while fierce competition for skilled workers has increased worker turnover rates at plants built by Japanese firms.
Japanese companies have flocked to Vietnam to tap its young workforce. According to the Japan External Trade Organization's office in Hanoi, the number of corporate members in the local association of Japanese businesses jumped from around 330 in 2001 to about 1,000 in October 2011.