Beyond Export Volume: How Vietnam Can Sustain Double-Digit Growth

Double-digit GDP growth within reach with shift to higher-value expansion

Vietnam’s recent economic performance has demonstrated remarkable resilience and growth, marked by an impressive total import-export value that exceeded $883.7 billion in 2024. With exports alone reaching $451.2 billion—a growth of nearly 17% year-on-year—Vietnam has significantly surpassed GDP growth targets. This sudden surge begs a crucial question: what does this mean for the sustainability of Vietnam’s growth and potential risks associated with it?

The Export Landscape

Vietnam has carved out a vital role in the global production and trade chain. Prior to this achievement, the total import-export value stood at $786 billion, reflecting a robust yearly increase of 15.4%. Though the data reveal a strong export trajectory, an over-reliance on external markets can pose a risk if global demand fluctuates. The allure of double-digit growth presents both opportunities and challenges.

Dependence on Foreign-Invested Enterprises

Foreign-invested enterprises (FIEs) account for nearly three-quarters of Vietnam’s total export turnover. This raises significant concerns about structural weaknesses versus transitional phases in the country’s economic framework. While the inflow of foreign capital is essential for growth, the extensive dependence on FIEs can stifle the development of domestic enterprises.

Efforts must be made to increase the share of exports contributed by local businesses. Despite the positive impact of FIEs on the economy, much of the production handled by these enterprises involves low value-added processes. Vietnam currently serves largely as a hub for assembly and processing, relying heavily on imported materials and equipment. Hence, developing supporting industries is critical for increasing the local content in exported goods.

Shifting Focus: Quality Over Quantity

As export growth becomes sluggish, the focus must transition from merely increasing volume to enhancing the value-added nature of products. A sustainable GDP growth strategy should balance exports with domestic innovation and development. The trade surplus recorded, which stood at around $18.64 billion with imports reaching $432.54 billion—a 19.4% increase—illustrates a need to deepen local production capacities. Reducing reliance on imported raw materials not only strengthens the trade surplus but also catalyzes GDP growth.

The Role of Domestic Enterprises

Encouraging local enterprises to engage in sophisticated production processes can significantly contribute to enhancing overall export competitiveness. As Vietnam continues to integrate into global supply chains, fostering a robust domestic industry will not only create jobs but also provide FIEs with more locally sourced inputs. This relationship will reinforce long-term foreign investments while mitigating the risks associated with processing-only operations, which are more susceptible to shifts in the global economy.

Enhancing Export Competitiveness

Vietnam’s textile and footwear industries, while already substantial contributors to export turnover, face challenges as global demand evolves. The production of basic goods may become increasingly unsustainable as domestic labor costs rise. Vietnam should pivot towards manufacturing higher-value, eco-friendly products aligned with consumption trends in developed markets.

The government has initiated policies, like Resolution No.68-NQ/TW, that encourage businesses to invest in research and development (R&D), allowing firms to allocate a percentage of taxable income to innovation and digital transformation efforts. This not only enhances product quality but also fosters a more skilled workforce equipped for future demands.

Strategic Initiatives for Growth

Resolutions aimed at promoting scientific and technological development emphasize allocating funds to R&D, mandating that expenditures reach 2% of GDP. By focusing on enhancing innovation capabilities and prioritizing R&D, Vietnam can position itself favorably in a rapidly evolving global market.

As the country aspires to achieve double-digit GDP growth targets by 2026, maintaining macroeconomic stability while preventing inflation and safeguarding economic balances will be paramount. Balancing these complex elements will enable Vietnam to sustain its impressive growth trajectory while embracing the global challenges ahead.

Through these strategies, Vietnam stands at a pivotal moment, where the right focus on innovation, quality, and self-sufficiency can transform its export landscape and sustain double-digit growth into the years to come.

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