In 2024, Vietnam emerged as a shining star among Southeast Asia’s manufacturing powerhouses, posting robust export growth that left regional peers Malaysia and Thailand in its wake.
While global supply chains continued to shift away from China, Vietnam seized the moment, capitalizing on its strategic advantages and export momentum—particularly to the United States. This standout performance not only underscores Vietnam’s growing clout in international trade but also signals its potential to redefine the region’s economic landscape.
Official data paints a compelling picture: Vietnam’s exports surged by 14.3% in 2024, reaching $405.53 billion, driven by strong demand for electronics, smartphones, clothing, and agricultural goods. In contrast, Malaysia and Thailand, while still vital players in the ASEAN bloc, struggled to match this pace. Malaysia’s export growth hovered around 12.7%, buoyed by commodities like palm oil and electronics, while Thailand’s lagged closer to 8%, hampered by weaker demand for automotive parts and rice. Vietnam’s edge, analysts say, lies in its ability to ride the wave of U.S.-bound shipments, a trend accelerated by trade tensions and diversification strategies reshaping global supply chains.
Sophie Dao, Senior Partner at Global Business Services LLC (GBS), an investment consulting firm based in Vietnam, sees this as a watershed moment. “Vietnam’s export growth in 2024 is a testament to its resilience and adaptability,” she remarks. “The country has positioned itself as a reliable hub for manufacturers looking to diversify beyond China, and the numbers reflect that trust. It’s an exciting time for businesses here—both local and foreign.” Dao’s optimism echoes the sentiment of many investors who view Vietnam as a cornerstone of the “China-plus-one” strategy, where companies maintain operations in China while expanding into nimbler, cost-effective markets like Vietnam.
What’s Driving Vietnam’s Success?
Several factors fueled Vietnam’s export boom last year. First, its proximity to China allowed manufacturers to tap into existing supply chains while avoiding the tariffs and restrictions increasingly imposed on Chinese goods. Second, a young, skilled workforce—58% of its 100 million people are under 35—kept labor costs competitive, drawing giants like Apple, which has poured over $15 billion into Vietnam over the past five years. Third, Vietnam’s 17 free trade agreements, including the Regional Comprehensive Economic Partnership (RCEP), opened doors to markets across Asia, Europe, and beyond.
The U.S. market, in particular, proved a goldmine. Vietnam’s trade surplus with the United States hit $104 billion in 2023, a figure likely dwarfed by 2024’s final tally as exports of tech gadgets and textiles soared. “The shift in U.S.-bound shipments has been a game-changer,” Dao notes. “Companies are rerouting production to Vietnam not just for cost savings, but for stability and access to a growing consumer base. It’s a win-win.”
Compare that to Malaysia and Thailand, where export growth, while solid, leaned heavily on traditional strengths. Malaysia’s electronics sector thrived, but its reliance on commodities left it vulnerable to price swings. Thailand, meanwhile, faced headwinds from a sluggish global recovery and domestic political uncertainties. Vietnam, by contrast, balanced its export portfolio—electronics led the charge, but farm produce like coffee and rice also shone—demonstrating a versatility that set it apart.
A Bright Spot in a Challenging Year
Vietnam’s 7.09% GDP growth in 2024, up from 5.05% in 2023, further cements its breakout status. Despite challenges like Typhoon Yagi, the strongest storm to hit Asia that year, the country’s economy roared ahead, propelled by $25.35 billion in foreign investment and an 8.4% rise in industrial output. Exports played a starring role, with 37 key items raking in over $1 billion each, accounting for 94.3% of total export value. Eight of those—think smartphones and solar panels—cleared the $10 billion mark, a feat that underscores Vietnam’s climb up the value chain.
For Dao, this resilience is no fluke. “Vietnam has turned adversity into opportunity,” she says. “The government’s proactive policies—streamlined regulations, infrastructure upgrades, and trade promotion—have created a fertile ground for growth. Investors are taking notice, and that’s only going to accelerate in 2025.”
Looking Ahead
Vietnam’s edge over Malaysia and Thailand isn’t just a 2024 headline—it’s a trend with legs. As U.S. President Donald Trump’s second term begins in January 2025, his tariff threats loom large, potentially pushing more firms to seek alternatives to China. Vietnam, already a proven player, stands ready to absorb that shift. The General Statistics Office projects trade turnover could hit $807.7 billion by year-end, a record that would solidify its lead in the region.
Still, challenges remain. Vietnam’s infrastructure, while improving, strains under rapid growth, and its trade surplus with the U.S. risks drawing scrutiny. Yet Dao remains bullish. “The momentum is undeniable,” she says. “Vietnam isn’t just outpacing its neighbors—it’s setting a new benchmark for what Southeast Asia can achieve. The world is watching, and we’re just getting started.”
In a region brimming with potential, Vietnam’s 2024 export surge marks it as the one to beat. Malaysia and Thailand remain formidable, but for now, Vietnam’s blend of agility, ambition, and opportunity has put it firmly ahead of the pack.
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Source: Vietnam Insider