Vietnam will be signed onto the revived Trans-Pacific Partnership trade pact, reinforcing its partnership with China who has placed a zero-tax policy on Vietnam’s imports. Moreover, the US imposes a low import tariff policy on Vietnam providing a platform to boost shipments to the US. Despite the trade war between the world’s two largest economies, Vietnam is placed at an advantage and many speculate its possible emergence to become the next manufacturing giant after China as manufacturers relocate their production headquarters to Southeast Asia.

With US imposing heavy tariffs on imports from China, trades between the two have significantly decreased in recent months. Vietnam’s exports to US, Korea and Japan, grows at an alarming rate and is able to compete with the Chinese market where tax duties of its imports are now strictly enforced by the US.

Since the 1980s, Vietnam has relied heavily on its manufacturing sector to attract foreign direct investments (FDI) and manufacturers from the US including renowned automobile brand, Ford, has established factories in the Southeast Asian country besides tech giants like Intel. US remains the largest export market for Vietnam, exporting over 46.64 billion USD worth of goods into US last year.

On the other hand, The Republic of South Korea (ROK) Chamber of Commerce announced that 46.1% of Korea-based corporate will continue to inject large sums of FDI into Vietnam despite the Trade War and 71% are confident and satisfied with the business trend of the Vietnamese market.

Analyses by the Ministry of Planning and Investment of Vietnam reported that there are over 6,130 projects funded by ROK-based companies up until June 2017. The projects accounted for 25.9% of the country’s total, accumulating to over 5.45 billion USD, 17.7% of the nation’s total capital injected by foreign firms. ROK has become the second largest of the 120 countries now with investments in Vietnam. ROK has already invested a total to 4.95 billion USD, accounting for 1/4 of nation’s total value up to Q2 this year.

Former minister of Planning and Investment of Vietnam and Chairman of Foreign Investment Association Mr. Ngyuen proposes that ROK’s capital injection remains crucial to the business sector in Vietnam, in one example, major electronic manufacturer, Samsung’s investments sums up to over 14.0 billion USD and provides over 1.4 million jobs across the nation.

In addition, Vietnam benefits as a popular investment destination for Japan in the manufacturing and production sectors. As of September, 2016, Japan has established over 1,500 manufacturing and production projects in Vietnam, valuing over 3.30 billion USD. Japan is now the third largest investor after ROK with over 3,200 projects valued over 42.0 billion USD. Under the China- US trade war, Vietnam will increase its partnership in electronic manufacturing, agriculture, fishery, ship production, automobile production and sustainable development with Japan and ROK.

Source: Tiexue