Vietnam’s rising electronics competitiveness drives a swing to trade surplus

In September, Vietnam posted a trade surplus of USD 1.27 billion, breaking a nine-month streak of deficits. Exports soared almost 40% year-on-year. And as our chart shows, computers, electronic components and telecom gear accounted for most of the gains.

The east Asian market (particularly China) is driving this growth, followed by the US and Vietnam’s ASEAN partners.

This points to Vietnam’s deeper integration into regional production networks as a “connector economy.” But it’s an open question as to whether the trade surpluses will remain. With imported electronic inputs flowing into the nation’s factories almost as fast as finished goods flow out, Vietnam’s trade balance will hinge on how much value it adds at home.