Effects of US - China war to Vietnam

- Recently, Moody's announced findings of a study that looked at 23 countries

across the Asia Pacific region. It found that Malaysia, Taiwan, Thailand and
Vietnam were the most likely to gain from trade moving away from China.
Ex:Many Vietnamese shops carry signs in Chinese, a lingering sign of the shared
history, though Vietnam and China have taken different turns in the modern
economy.
- As the trade war between the US and China shows no signs of abating, Vietnam
has progressively ramped up manufacturing, attracting foreign investors and
increasing exports to the US
-In the first quarter of 2019, export turnover of goods was estimated to reach
US$ 58.51 billion, a rise of 4.7% compared with the same period in 2018, of
which the domestic economic sector achieved US$ 17.05 billion, moving up by 9.7%;
the FDI sector (including crude oil) gained US$ 41.46 billion, increasing by 2.7%,
accounting for 70.9%.
-GDP growth in the first quarter of the years: 5.90% in 2011; 4.75% in 2012;
4.76% in 2013; 5.06% in 2014; 6.12% in 2015; 5.48% in 2016; 5.15% in 2017; and
7.45% in 2018; and 6.79% in 2019.
-This is despite import duties imposed in March 2018 by the US on
Vietnam’s steel products. The tariffs were imposed to prevent steel products that
originated from China that attempted to bypass anti-dumping rules. The
Vietnamese government, subsequently, issued new regulations related to the
origin of exported and imported goods
-The US was Vietnam’s biggest export market, followed by the EU and China.
However, Vietnam also spent US$57.98 billion on importing goods in the first
quarter up 8.9 percent. Major import products included equipment and material
for production, electronic products and computer components.
-Nine months into the US – China trade war, and with frosty relations between
the two countries ongoing, foreign companies have found it pertinent to move
operations elsewhere from China.

The tariffs have especially affected small and medium sized businesses who have
seen costs jump. This has resulted in businesses working with suppliers to find
alternate countries such as Vietnam to bypass the tariffs. Several others are
starting to take control of their supply chains using local expertise.

-However, it is important to note that instead of abandoning the Chinese market,

investors are choosing to supplement Chinese operations with low-cost input
sources from markets such as Vietnam.