Vietnam has posted 9 consecutive months of trade surpluses and HSC forecasts that this will continue for the foreseeable future. In our opinion, we are witnessing the historic transformation of Vietnam into a trade surplus nation.
This has several key causes; the main cause being the building of an industrial base largely funded by heavy FDI since WTO entry. While in earlier years much of the FDI was in unproductive areas such as real estate, in recent years the focus has shifted into the textile and technology industries.
Vietnam’s geographic location is vital. Close proximity to major shipping lanes and the existing plant network allows multi-nationals to easily incorporate a Vietnamese plant into their existing supply chain without too much disruption. As a result, we expect the shift of low-end manufacturing to Vietnam to continue and perhaps even accelerate over the next decade with positive implications for exports, and hence the trade surplus.