Asia: “Made in Vietnam”- Understanding the rise of Vietnam as an export powerhouse

Key points

• Rising globalisation has greatly benefitted emerging Asia as supply chain migration from developed countries fuelled the region’s tremendous export growth over the past decade
• Vietnam has been a standout winner in gaining export market share in labour-intensive and low margin segments where China has lost competitiveness
• The country’s attractiveness as a supply chain location is credited to its successful integration in international trade, geographic advantage, and manufacturing competitiveness – including cheap labour, and favourable government policies for foreign investment
• Vietnam has successfully moved into the space created by China’s continued economic evolution. However, Vietnam’s relatively small size compared to China, means that it cannot replace China’s “world’s factory” title. Instead, as a close trading and production partner in China’s expanded supply chain ecosystem, Vietnam looks set to continue to thrive
• COVID-19 disruptions, domestic policies, and geopolitical tensions could pose risks for Vietnam’s continued rise as a manufacturing and export powerhouse