When China stalls, Vietnam sees its growth jump to 13.7%

Last month, Vietnamese state media were delighted to learn of the forthcoming launch, in a factory in the north of their country, of the production of new Apple Watches and of the first studies on a possible local manufacture of MacBook computers. . A symbolic relocation for products that have been, for years, exclusively assembled in China.

Taking advantage of an influx of investment from multinationals and a surge in its international trade, Vietnam saw its gross domestic product jump in the third quarter by 13.67% year-on-year. Over the first nine months of the year, growth has now reached 8.83%, said the General Bureau of Statistics (GSO) in Hanoi.

Asian rebalancing

While this spectacular surge is partly explained by an abnormally weak base effect, linked to the poor performance of a summer of 2021 disrupted by the Covid pandemic, it is also driven by a profound reorganization of economic balances in Asia.

Worried about the rise of geopolitical tensions between Washington and Beijing, the takeover of many sectors by the Chinese government and the disruption of production chains caused by the “zero Covid” strategy, foreign companies are accelerating their diversification and inaugurating more in addition to factories in Southeast Asia, and particularly in Vietnam. “Over the first nine months of 2022, foreign investments actually made increased by 16.3% to reach 15.4 billion dollars”, explains the GSO. “This is the highest amount recorded over nine months in the last five years,” said government economists.

Export dynamics

Following the major textile or sportswear brands, such as Nike, Adidas or Uniqlo, which left Southeast Asia a few years ago to seek lower wages than those practiced in China, the electronics giants are accelerating in turn their investments in the region, where the workforce has gained in skills. The assemblers of Apple products, such as Foxconn, Pegatron and Luxshare are thus boosting their capacities in Vietnam and delivering more and more “Made in Vietnam” products every month.

Over the first three quarters, Vietnamese exports increased, compared to the same period of 2021, by 17.3%. Shipments to the United States were particularly dynamic with a surge of 25.4%.

Solid household consumption

In its report, the GSO also welcomes the good recovery of domestic demand, which had suffered, until the beginning of 2022, from the travel restrictions put in place by the communist authorities to contain the Covid epidemic. In the third quarter, private consumption thus increased by 10.1%, helping to maintain inflation approaching 4% in recent weeks.

In its latest report, the World Bank estimated that the Vietnamese government would succeed in containing this rise in consumer prices in the coming months, thanks in particular to controlling gasoline prices. The international institution estimates that the country will post growth of at least 7.2% over the whole of 2022 and will establish itself as the most dynamic economy in all of Asia.

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