The sluggish global economy, continuing volatility in global crude oil prices and an economic downturn in China – the world's second largest economy – have dealt a big blow to ASEAN exports, especially those of Thailand, Malaysia and Singapore, because they have been heavily dependent on China and oil as well as other commodity shipments. However, Vietnam's export value is defying the regional trend, surging 9.2 percent YoY to USD91.8 billion over 7M15.
We at KResearch partly attribute that increase in Vietnam's exports to its export structure that comprises largely consumer goods having strong demand in global markets, especially smartphones. Economic recovery in the US – the largest trade partner of Vietnam – has also been helpful towards improving its overall export performance.
Moreover, Vietnam's export sector has been bolstered by increased foreign direct investment as foreign companies increasingly use it is a production base for exports, given relatively low labor costs and GSP privileges granted by developed nations. Vietnam's membership in the Trans-Pacific Partnership and the signing of free trade agreements with the European Union and South Korea in 2015 will also help enhance its importance as an attractive export-oriented investment destination. Due to these advantages, it is likely that Vietnam's export sector will continue to flourish ahead.
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