Foreign firms in Vietnam, rather than Vietnamese firms, dominate Vietnam’s exports to the world and particularly the US. In the garment sector, for example, Vietnamese companies only account for 16 per cent of the country’s export value with FDI firms making up the remaining 84 per cent.

South Korean garment manufacturers in Vietnam have been the biggest contributors. South Korean companies account for almost half of Vietnam’s garment export value. South Korean corporations have been in Vietnam since early 2000s and have well established supply chains in the country. In comparison most Vietnamese companies are still small-sized and do not meet foreign buyers’ requirements on quality, quantity and cost. South Korean and Taiwanese companies account for 98 per cent of Vietnam’s total exports of phones and parts. Vietnamese firms only contribute indirectly to the export growth by supplying some parts for these foreign companies.

Many American customers buy from their partners in China or from FDI companies manufacturing in Vietnam. US buyers still prefer products from China because prices are more competitive than that of Vietnamese products. The bulk of Vietnam’s imports comes from China, which accounts for 18.2 per cent of all imports into Vietnam. China is followed by South Korea, Asean, Japan and the EU.