Summary:

Vietnam’s export sophistication has been upgraded rapidly during the past 10 years. The electrical machinery and equipment sector has seen a rapid escalation in growth, particularly after 2010, boasting an impressive average annual growth rate exceeding 33%. By 2022, this sector contributes to nearly 40% of Vietnam’s total exports. Yet, labor-intensive low-value-added manufacturing industries remain important to the Vietnam economy, accounting for nearly 20% of the nation’s total exports.

Highlights:

• Despite a marked downturn from 2007 to 2010, likely due to the global financial crisis, Vietnam’s top 7 exporting products rebounded sharply and consistently accounted for about 70% of Vietnam’s total exports.
• The electrical machinery and equipment sector stands as Vietnam’s top exporting sector after 2010, reaching a value of US$140.63 billion in 2022. This rapid growth was likely spurred by major investments from leading electrical equipment manufacturers, such as Intel’s US$1 billion chip facility in Ho Chi Minh in 2010. Samsung’s substantial investments, starting with a US$670 million mobile phone factory in 2008, culminating in a US$5 billion investment for Samsung Electronics Vietnam Thai Nguyen, and a significant R&D center opened in 2022, have been particularly noteworthy.
• Over 22 years, Vietnam has significantly reduced its dependence on heavily natural resource-reliant industries. The minerals and fuels sector, which peaked in 2008 at US$12.6 billion, has since declined at an average rate of 4% per year. By 2022, it contributes just 1.16% of Vietnam’s total exports.
• Vietnam’s economy continues to be buoyed by labor-intensive low-value-added manufacturing sectors. Although shares of footwear and apparel exports in total exports slightly declined to 6.62% and 9.17% in 2022 from 10.16% and 12.36% in 2000, other sectors like furniture have grown from 1.62% to 3.74%, offsetting these shifts.

Article By Banh Thi Hang

Graphic By GE, Yixuan