VINACHEM

Vietnam is asserting itself as one of the world’s most promising and reliable centres for trade and manufacturing.

Backed by robust export performance, strong foreign direct investment (FDI) inflows, and expanding international partnerships, the country is rising as a vital node in global supply chains, particularly in electronics, textiles, agriculture, and high-tech manufacturing.

Impressive trade growth - rising role in global supply chains

In 2023, Vietnam’s total trade turnover reached over US$683 billion, placing the country among the top 20 global trading economies. For 2024, the country’s exports hit US$405.5 billion, marking a 14.3% increase year-over-year, a remarkable performance amid global economic uncertainties.

Vietnam has recorded a trade surplus for nine consecutive years, reflecting the strength and sustainability of its export-led economic model. Products such as smartphones, electronics, computers, garments, and agricultural goods continue to dominate export portfolios.

The country is emerging as a critical production hub in the global electronics and high-tech supply chains. Exports of computers, electronics, and components in 2024 reached US$72.56 billion, a 26.6% increase from 2023. In particular, Vietnam is now the world’s second-largest exporter of smartphones, trailing only China.

These gains not only highlight Vietnam’s manufacturing capabilities but also its ability to deliver high-quality, competitive products on the global market.

Minister of Industry and Trade Nguyen Hong Dien emphasised that Vietnam is “always ready to be a reliable partner in the global supply chain” and is committed to working alongside other partners to build a fair, adaptive, and sustainable trade environment.

Leading global tech giants, including Samsung, Apple, Intel, LG, and Foxconn, have established large-scale operations in Vietnam. Samsung now assembles a significant share of its global smartphones in the country, while Apple’s suppliers are rapidly expanding their footprint in Vietnam to diversify away from China.

This growing presence reflects a broader trend that Vietnam is becoming a key part of multinationals’ strategy seeking alternative manufacturing locations that offer stability, competitive labour costs, and favorable trade access.

Strategic engagement in global trade Agreements

In addition, Vietnam’s proactive participation in a network of new-generation free trade agreements (FTAs) has significantly expanded its market access and reduced trade barriers. These include the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the EU–Vietnam Free Trade Agreement (EVFTA), and the Regional Comprehensive Economic Partnership (RCEP).

These agreements not only open doors to markets across Europe, Asia, and the Pacific but also require compliance with high standards on labour, sustainability, and rules of origin, helping to enhance the quality and reputation of Vietnamese exports.

The RCEP, in particular, is facilitating the formation of an integrated Asia-Pacific supply chain, allowing Vietnam to deepen linkages with both raw material suppliers and final markets across the region.

Balanced approach amid US - China competition

Vietnam is skillfully balancing its strategic and economic relationships with both the United States and China, two of its largest trade partners.

With the United States, the upgraded Comprehensive Strategic Partnership in September 2023 reflects deepening political and economic ties. In 2024, exports to the US fetched US$119.6 billion, with a record trade surplus of US$104.6 billion.

Vietnam is considered a key partner in Washington’s strategy to build resilient and trusted supply chains, especially in critical areas like semiconductors. The 2023 state visit by the then US President Joe Biden highlighted bilateral cooperation in high-tech sectors, including the joint development of a secure semiconductor supply chain.

Meanwhile, Vietnam maintains close economic relations with China, the largest overall trading partner by total trade volume. China supplies about one-third of Vietnam’s import value, primarily components and materials for electronics and textiles.

Vietnam is also pursuing a diversification strategy while leveraging the RCEP to optimise supply chain linkages and reduce dependency on any single source.

High-level dialogues between leaders of both countries continue to uphold the spirit of friendly neighbourly, comprehensive cooperation, and mutual development, which is crucial for keeping supply flows stable and uninterrupted.

To maintain its reputation and market access in increasingly demanding markets like the U.S. and EU, Vietnam is taking steps to meet higher standards of traceability, labour practices, and environmental sustainability.

According to Andrea Coppola, Lead Economist at the World Bank in Vietnam, the US - China trade tensions have created positive spillovers for Vietnam’s exports, particularly in electronics and machinery. But to sustain this momentum, Vietnam must ensure it complies with stricter rules of origin and labour standards.

Vietnam is thus aligning its policies and production standards to strengthen long-term trust and avoid potential trade risks, such as anti-dumping investigations or accusations of origin circumvention, so as to maintain the long-term confidence of both major markets.  – Source: VOV –