(Yicai Global) April 27 -- Vietnam's exports were nearly double that of China’s economic hub Shenzhen last month as the southeast Asian country profits from a shift in global supply chains. But the two nations' economies complement one another and are not necessarily in competition with each other, an academic at a research institute under the University of Science and Technology of China told Yicai Global.

Vietnam’s exports already overtook those of Shenzhen three years ago, but the gap has grown since then, said Chen Jing, vice president of USTC’s Technology and Strategy Research Institute.

Vietnam’s exports jumped 48.2 percent in March from the month before and 14.8 percent from a year earlier to USD34.7 billion, while Shenzhen’s exports contracted 14 percent year on year to CNY120 billion (USD18.3 billion), according to the two countries’ custom offices.

Vietnam has taken over a lot of China’s overseas orders in the last decade as global supply chains seek cheaper labor costs, especially in the textile and electronics assembly industries, Chen said. But this does not affect China’s own fast-growing export trade. By contrast, it enhances the relationship between the two nations, he added.

Vietnam imports a large number of raw materials or parts from China for assembly export, Chen said. Bilateral trade between China and Vietnam jumped 19.7 percent last year from the year before to USD230.2 billion, and China had a trade surplus of USD45 billion with Vietnam, according to China’s General Administration of Customs.

China is Vietnam’s largest trade partner and second-biggest export destination, and Vietnam is China’s largest trade partner among the member countries of the Association of Southeast Asian Nations.

It is not only global brands such as South Korea’s Samsung and the US’ Intel that are seeking out Vietnam as a production base, more and more Chinese consumer electronics firms, such as Luxshare Precision Industry, Goertek and Pegatron, have also started manufacturing in the Southeast Asian country since the start of the Covid-19 pandemic.

New Asian Tiger

Vietnam’s exported USD27.3 billion worth of mobile phones, electronic products, computers and components in the first quarter, already nearly half the value of last year’s exports.

The labor-intensive textile industry is also doing very well. Vietnam exported almost USD8.2 billion worth of garments in the first two months, up 59 percent from a year ago. Apparel exports are expected to reach USD12.7 billion in the first quarter.

Vietnam reopened to foreign tourists on March 15 and tourism is expected to be another growth driver. Before the pandemic in 2019, tourism accounted for 9.2 percent of the nation’s gross domestic product.

As domestic demand rises and tourism picks up, Vietnam’s economic growth is likely to soar to 6.5 percent this year, much faster than last year’s 2.58 percent, the Asian Development Bank said.

The opening-up of tourism will promote technical experts to go back to Vietnam and this will benefit the country’s manufacturing industry, Zhou Shixin, an associate researcher at the Asia-Pacific Research Center of Shanghai Institute for International Studies, told Yicai Global.

Editor: Kim Taylor