US – China Trade War Inspires Vietnam Growth

As the trade war between the US and China shows no signs of abating, Vietnam has progressively ramped up manufacturing, attracting foreign investors and increasing exports to the US.

The country’s real GDP climbed by 6.79 per cent on the year during the first quarter of 2019 as per official government data. It also enjoyed the second strongest first-quarter growth in the past decade, surpassed only by 7.45 per cent in 2018. Exports to the US jumped by 26 per cent on the year in the first year.

This is despite import duties imposed in March 2018 by the US on Vietnam’s steel products. The tariffs were imposed to prevent steel products that originated from China that attempted to bypass anti-dumping rules. The Vietnamese government, subsequently, issued new regulations related to the origin of exported and imported goods.

The apparel industry performed particularly well, followed by textile companies moving operations to Vietnam from China. The developments came even with China’s economy slowing down, reducing Vietnam’s export to the country by 7 per cent. Analysts from the Mizuho Research Institute say that even if the global economy slows down, companies relocating from China to Vietnam is expected to continue.

This is an excerpt from an article appearing in Vietnam Briefing, a subsidiary of Dezan Shira & Associates. For the latest economic, regulatory and business news from Vietnam, visit vietnam-briefing.com.