Vietnam gets bigger slice of world export pie as companies leave China

The country’s share of textile exports rose from 5.9 percent in 2015 to 8.9 percent last year, while that of China fell from 38.3 to 29.1 percent, according to a report by market research firm Fitch Solutions.

Some other countries, such as Bangladesh, also saw rising export share in the period.

"This is a clear sign that as a result of rising labor costs in China, textiles, one of the most labor intensive types of manufacturing, is now rapidly being shifted out of China to reduce production costs," the report said.

A similar trend is happening with consumer goods produced with low technology.

Vietnam’s share of furniture exports rose from 3.3 percent in 2010 to 8 percent last year, an increase of $5.3 billion in value.

Its share of fishing equipment exports rose from 2.1 percent to 3.9 percent in the period, an increase of $77.9 million in value.

Its share of umbrella exports rose from 0.1 percent to 0.7 percent in the period, an increase of $18.6 million in value.

Other Southeast Asian countries that have seen their share of exports rising in recent years are Cambodia, Indonesia, and Malaysia.

The trend of shifting manufacturing away from China is expected to continue because of the U.S.-China trade tensions and the Covid-19 pandemic prompting companies to diversify their supply chains.

Products that are going to be produced more outside of China are electrical appliances and electronics such as vacuum cleaners, electric shavers and lamps, Fitch Solutions said.

There is also direct evidence that Vietnam is among the beneficiaries of production moving out of China in recent years. Major tech giants like Apple, Google and Microsoft have begun or plan to start production in Vietnam this year.

The world’s largest contract manufacturer Foxconn has recently confirmed that Vietnam is its largest manufacturing hub in Southeast Asia, with capacity bigger than in South Asian giant India.