Vietnamese goods made up 0.7% of global exports in 2013, representing an increase of 0.4% since 2007, according to latest report by HSBC.
In labour intensive manufacturing, items such as footwear and apparel are growing more rapidly, HSBC said.
The goal, of course, is to export to richer economies, especially the US, to improve the standard of living. Last year, Vietnam was the US’ 20th largest supplier of goods, totalling US$25 billion.
Vietnam’s exports to the US grew 23.5% from January to September 2014. The Trans-Pacific Partnership (TPP)’s ultimate prize is a free trade agreement (FTA) with the world’s largest economy, allowing better access for Vietnamese goods. Whether it is an agreement with the Eurozone FTA or the Regional Comprehensive Economic Partnership (RCEP), Vietnam is trying to improve connectivity so its goods can gain better access.
The November HSBC manufacturing PMI index shows that new export orders are increasing and output is expanding. Sluggish global demand is causing firms in developed economies to find ways to cut costs, pushing even small and medium enterprises to find cheaper alternatives.
Thanks to a steady disbursement of FDI and cheap wages, the employment sub-index of the PMI has grown steadily, a positive sign for a country with plenty of workers to productively absorb into the labour force.
However, beyond cost advantages, Vietnam will need to improve its trade infrastructure (logistic costs, roads and airports) and technical skills, to name a few examples, to move up the value chain, HSBC suggested.
(VOV)
