Vietnam to become a key driver of global trade growth

Vietnam’s exports are expected to reach $618 billion by 2030 for annual growth of 7 per cent, outpacing the global average of 5 per cent by a significant 2 percentage points, according to the “Future of Trade: New opportunities in high-growth corridors” report from Standard Chartered.

The report projects that global trade is set to reach $32.6 trillion with growth of 5 per cent by 2030, and Vietnam will be a key driver of this growth.

Ms. Michele Wee, CEO of Standard Chartered Vietnam, said that Vietnam holds tremendous potential to be a global trading hub. “As an international bank with 119 years in Vietnam, we are uniquely positioned to facilitate cross-border transactions and support our clients in navigating the complexities of the market and seizing global trade opportunities,” she added.

According to the report, Vietnam is set to become a key high-tech manufacturing hub in ASEAN. In addition to its large and educated workforce and competitive manufacturing costs, Vietnam also benefits from its wide-reaching web of FTAs across North America, Asia, and Europe. These fundamentals, conducive to manufacturing and trade, are expected to continuously drive Vietnam’s economic development and competitiveness. Vietnam has continued to attract major global businesses setting up manufacturing bases in the market in recent years. To further integrate itself into the international trade system, Vietnam is also improving the quality of its logistics infrastructure.

Key initiatives driving Vietnam’s trade include attracting global high-tech firms by offering tax benefits and financial support for footprint expansion, aiming to become a high-tech manufacturing destination through vocational training for a stronger workforce, and making products more attractive to developed markets by using sustainable energy for manufacturing.

China, South Korea, and the US are expected to be Vietnam’s key trade partners in the coming years. Trade with India, Singapore, and Indonesia is also forecast to experience robust growth from 2021 to 2030.

Furthermore, growing global demand for electronics, investments, and sustainability initiatives will drive Vietnam’s key exports, including Machinery and Electricals, Textile and Apparel, and Metals and Minerals. On the other hand, mirroring the key export sectors, Vietnam’s imports will be driven by the need for components and energy in its key manufacturing sectors.

On a global overview, according to the report, high-growth export corridors in ASEAN, South Asia, Africa, and the Middle East will outpace the average annual global trade growth rate of 5 per cent by 2030. Global trade will be anchored in Asia, Africa, and the Middle East, with the combined exports from these regions accounting for 44 per cent of global trade by 2030.

However, markets in Asia, Africa, and the Middle East are the most vulnerable to disruptions due to issues ranging from infrastructure gaps to varying levels of institutional maturity. Businesses in these regions must focus on building more resilient supply chains to continue to take advantage of growth opportunities and drive the next decade of global trade.

By 2030, increased adoption of digital supply chain finance solutions could drive up exports by 7.5 per cent in the 13 surveyed markets, an uplift of $791 billion. Digital supply chain finance solutions can also help drive greater financial inclusion and participation for small and medium-sized enterprises (SMEs), help companies track adherence to ESG criteria, and reduce the risk of fraud and cost of monitoring.

“Global trade is set to drive the next decade of growth,” said Mr. Michael Spiegel, Global Head, Transaction Banking, at Standard Chartered. “We aim to help our clients improve access to finance and achieve ESG compliance across their entire supply chains. Digital supply chain finance solutions will play a game-changing role in achieving these goals and enable sustainable trade growth across developing economies.”