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Supply chains strengthened in Vietnam as trade flourishes
With nearly $340 billion of goods supplied to the world in 2021, Vietnam is an increasingly important link in the global supply chain.
The supply chain link of goods from Vietnam is increasingly having an impact on the global economy, especially amid the pandemic. During the 4th Covid-19 outbreak last year, many large corporations from the US, Japan, and Europe… were all worried that the decline in production in Vietnam would affect the supply of goods for them.
Assessing the rapid recovery of supply chains in Southeast Asia, including Vietnam, Nikkei affirmed that Southeast Asia has a particularly great impact on the Japanese auto industry. Apparently, 40% of its automotive electrical wiring is supplied from Vietnam.
Mr. Shimizu Akira, Chief Representative of JICA Vietnam, said that if Vietnam reduces production, it will disrupt the entire global supply chain, and at the same time reduce Vietnam’s advantage in attracting investment and business readiness. To strengthen the supply chain in Vietnam, JICA is making efforts to transfer technology and strengthen linkages between Japanese and Vietnamese companies.
According to the General Statistics Office, in the first two months of 2022, Vietnam’s total export turnover of goods still reached 53.79 billion USD, up 10.2% compared to the same period last year.
In its Vietnam Macroeconomic Update February 2022, the World Bank (WB) emphasized that Vietnam’s economy has many positive signals in early 2022 as the main indicators of Vietnam’s economy all increased strongly before the Lunar New Year thanks to the high vaccine coverage rate that exceeded 73% of the population.
Success in attracting FDI in recent decades has helped Vietnam rise up as a supplier in many fields.
If the export revenue of phones and components from Vietnam last year reached nearly 58 billion USD, that of computers also reached approximately 51 billion USD. The two industries of footwear and textiles contributed over 60 billion USD, wood and wood products with 15 billion USD… Obviously, Vietnam’s influence on global supply capacity with these products is considerable.
Mr. Adam Sitkoff, Executive Director of the American Chamber of Commerce in Vietnam (AmCham Hanoi), said that American investors have played an active role in the transformation and growth of the Vietnamese economy.
AmCham’s members represent billions of US dollars of foreign investment, tens of thousands of direct employees, and hundreds of thousands of indirect employees, which have contributed significantly to Vietnam’s exports and tax revenue.
In 2021, two-way trade between Vietnam and the US reached over 111 billion USD. The US was the largest export market of Vietnam with a total value of 96.29 billion USD, up 24.9% compared to 2020, accounting for 28.6% of export turnover.
Large American corporations have affirmed Vietnam’s important role in the global supply chain. In August 2021, when Vietnam was heavily affected by the Covid-19 pandemic, 90 CEOs of top US brands such as Coach, Gap, Hane Brands, Nike… called on the US President to increase vaccine aid to Vietnam.
Dr. Le Dang Doanh told a recent seminar that free trade agreements (FTAs), including the EVFTA, allow the country to diversify and reduce dependence on a number of markets.
The 15 FTAs already in effect, including many new generation FTAs such as CPTPP, EVFTA, UKVFTA, and the Regional Comprehensive Economic Partnership (RCEP) that took effect in January 2022, show a strong point in trade relations with countries.
Overcoming the negative impact of the pandemic, for 2020-2021, Vietnam still retained its position as a major production center, with exports increasing by 7% (282.6 billion USD) and 19% (336 billion USD), trade surplus of 19 billion USD and nearly 4 billion USD, respectively. Many international organizations believe that Vietnam’s growth in 2020-2021 will become an advantage in the long run for global corporations to shift part of their production to Vietnam.
Mai Lan
Source: https://vietnamnet.vn/en/feature/supply-chains-strengthened-in-vietnam-as-trade-flourishes-822912.html