By Sherine Chen    Photo： CANVA

In recent years, Vietnam has become a rising force in global trade, drawing comparisons to China's rapid economic growth. With companies seeking alternatives to, Vietnam is gaining attention as a potential successor. But can it truly take China's place in trade? 

Why Vietnam is Poised for Growth

1. Strategic Location: Vietnam is located in the heart of Southeast Asia, offering easy access to key markets such as China, India, and the broader ASEAN region. Its proximity to major shipping routes enhances its attractiveness as a trade hub.
2. Favorable Trade Agreements: Vietnam has embraced globalization by signing numerous free trade agreements (FTAs), including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP). These agreements lower tariffs and open new markets for Vietnamese exports.
3. Competitive Labor Costs: Vietnam’s labor costs remain significantly lower than those in China. This makes it an appealing destination for companies looking to optimize their production expenses, particularly in labor-intensive industries such as textiles, footwear, and electronics.

The Challenges Ahead

While Vietnam has made impressive strides, it faces several obstacles that could hinder its ambition to replicate China’s trade dominance:

1. Scale and Capacity: China’s vast population and industrial base provide a scale that Vietnam cannot match. With a population of approximately 100 million compared to China’s 1.4 billion, Vietnam’s workforce and domestic market are relatively small.
2. Infrastructure Gaps: Despite improvements, Vietnam’s infrastructure—including ports, roads, and logistics systems—lags behind that of China. Addressing these gaps is crucial for sustaining growth and meeting the demands of global trade.

Although it faces challenges mentioned above, Vietnam has become home to several factories producing high-profile products. Nike and Adidas also rely on Vietnamese factories for a significant portion of their footwear, showcasing the country’s adaptability in catering to diverse industries. In addition to electronics and footwear, Vietnam’s textile and garment sector plays a vital role in supplying global brands such as H&M, Zara, and Uniqlo, further emphasizing its importance in the global clothing market.

Rather than becoming the next China, Vietnam is carving out its own identity as a complementary manufacturing hub within the global trade ecosystem. By leveraging its strategic location, competitive labor costs, and increasing role in supply chain diversification, Vietnam is solidifying its position as an essential player in international trade.

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