Rapid growth of export 

The export turnover of goods increased from $5.4bil in 1990 to $32.5bil in 2005. The figure was $39.8bil in 2006, and it is likely to reach $47.5bil in 2007. The ratio of export turnover to GDP also increased rapidly from 30.8% in 1990 to 65% in 2006 and 67% in 2007, high levels in the region and in the world (4th among ASEAN countries, 5th in Asia and 8th in region). Export turnover per capita rose from $36.4 in 1990 to $473.2 in 2006 and is likely to reach $557 in 2007.

The acceleration of Vietnam’s exports can be explained by many factors, including the considerable expansion of export markets. There are four salient points in Vietnam’s export markets as follows.

First, the number of countries and territories that import Vietnamese goods has increased rapidly in the last ten years. Before the Doi moi (renovation process), Vietnam mainly had trade relations with the countries in the communist bloc. Since Doi moi and the Foreign Investment Law, Vietnam’s export markets have been expanded. However, Vietnam’s exports only grew considerably after the US lifted its embargo against Vietnam in 1995, and Vietnam joined ASEAN; they further benefited from the Vietnam-US Bilateral Trade Agreement (signed in 2000) and Vietnam’s WTO membership (early 2007). Vietnamese goods are now present in most countries around the world.

Second, among 200 countries and territories that import goods from Vietnam, 28 countries have annual import turnover of over $100mil, and 16 countries over $500mil. Seven countries import more than $1bil worth of products from Vietnam. The US leads the list, followed by Japan, China, Australia, Singapore, Germany, Malaysia and the UK. Experts have advised Vietnamese exporters not to ‘put all eggs into one basket’ and pay attention to expanding export markets instead of relying on a few markets.

Third, several of the said markets could import much more from Vietnam, including traditional markets (former socialist nations) and new markets (Latin America, African countries, Australinea (except Australia).

Fourth, among the 200 countries and territories that have trade relations with Vietnam, Vietnam always has a trade surplus position with 159 countries, including the US, Australia, the UK, the Philippines, Germany and Belgium.

Meanwhile, Vietnam always has trade deficit with 47 countries and territories, including Taiwan, Republic of Korea, China, Singapore, Thailand, Hong Kong, Switzerland, India and Kuwait. The trade gap mostly occurs with nearby markets, not markets of source technologies, while the trade surplus occurs mainly with faraway markets, the source technology markets.

Hanoi Group Assessment

Along with China's shifting trend from manufacturing of lower-tech products to higher technology and increasing wage level, Vietnam is becoming one of the most, if not the most attractive destination in Asia to make labor-intensive goods. Mechanical engineering will also become one of the top items in foreign companies' shopping list. Those sectors offer opportunities for foreign importers (or global sourcing deparment of international enterprises) as well as for suppliers of equipments, machineries, tools etc. because of (1) the devastating demand of up-grading the production to get ready for global orders and (2) the country's limited capability of making the machineries and manufacturing tools by itself.