Introduction

Over the past couple of years, the US and China have been engulfed in a full-scale trade war. Both countries have imposed tariffs on each other’s products, thereby hurting their trade prospects

  • While this trade war has proved to be damaging for both these nations, it has proved to be a major boost for several other countries including Vietnam, India, and Mexico
  • These three countries are trying to make the most of this opportunity by increasing production and thereby boosting their exports to other nations

Vietnam has taken the lead in this regard, as the country has managed to attract US companies that are looking to leave China

  • In addition to this, Vietnam has also managed to ramp up the production of its own factories, helping it in improving its trade position
  • One industry that has reaped the rewards of this strategy, in particular, is electricals and related equipment
  • This industry has become the leading sector in Vietnam in terms of exports to other countries

This blog discusses Vietnam’s export of electricals and related equipment, as well as the key reasons behind it

Vietnam’s Electrical Exports are Surging

During the year 2019, Vietnam exported electrical machinery and equipment worth $126.9 billion

  • This sector accounted for nearly 41.7% of the total exports from the South-East Asian nation
  • This figure is far ahead of the second most prolific sector, which was footwear
  • During 2019, footwear exports from Vietnam accounted for only 8.1% of the total exports
  • This indicates that there is a wide gulf between the two sectors, and there is no real competition for the electrical machinery sector in Vietnam

During the year 2019, the electrical machinery sector exports recorded an annual growth of 46.5%

  • This growth was driven by the improved productivity in Vietnamese factories, the decline of China, as well as the high demand from Western countries
  • Nearly 22% of all exports from Vietnam are destined for North American countries
  • This growth was driven by the improved productivity in Vietnamese factories, the decline of China, as well as the high demand from Western countries
  • Nearly 22% of all exports from Vietnam are destined for North American countries

Vietnam has also attracted several multinational corporations to its shores. These companies have also helped the country in increasing its machinery exports

  • The country has also simplified the export procedures in recent years, making it simpler for exporters to target new markets around the world
  • Furthermore, Vietnam has also signed free trade agreements with different countries and region in order to smoothen the export process
    • For example, there is a free trade agreement in place between Vietnam and the European Union (EU)
  • In addition to the above, Vietnam has also been providing tax incentives to this particular sector. This development has also helped the country in growing its exports
  • Overall, Vietnam has done really well in order to increase its market share in the electrical machinery sector. The country will be hoping to improve its situation even further in the post-COVID era
  • The country has also simplified the export procedures in recent years, making it simpler for exporters to target new markets around the world
  • Furthermore, Vietnam has also signed free trade agreements with different countries and region in order to smoothen the export process
    • For example, there is a free trade agreement in place between Vietnam and the European Union (EU)
  • In addition to the above, Vietnam has also been providing tax incentives to this particular sector. This development has also helped the country in growing its exports

Overall, Vietnam has done really well in order to increase its market share in the electrical machinery sector. The country will be hoping to improve its situation even further in the post-COVID era

To conclude, it is clear that there are several reasons why Vietnam is among the leading exporters of electricals and related products. Institutions such as Euro Exim Bank offer customized support to traders in the form of financial instruments and bespoke trade advisory services. Euro Exim Bank offers financial instruments such as Bank Guarantees and Letters of Credit (LCs). Further information about Euro Exim Bank and its key product offerings is available here.