Vietnam’s Manufacturing Rise in the Global Economy

Apolline Dubois Nguyễn
15 minutes ago
3 min read

Introduction:

Vietnam’s economic transformation has been regarded as one of the most defining movements in this century. The country’s rise as a manufacturing powerhouse made it one of the world’s growing economies, bolstered by its surging exports and investments. In 2025, its economy grew by 8.09%, while nominal GDP reached $514 billion (Viet Nam News). Its economic momentum was largely driven by its growing manufacturing sector, with public investments reaching a record high of $41 billion. Furthermore, Vietnam’s economic growth and reforms marked a historic reduction in poverty, from 38% to under 6%

by 2023 (Kim). Vietnam’s historic transformation serves as a testament to the impact of economic reforms and growth on the lives of millions.

The Rise of Vietnam as a Manufacturing Powerhouse

Vietnam’s rapid surge as a manufacturing powerhouse is driven by its competitive labor costs, strategic location in Southeast Asia, and its China +1 strategy, which attracts significant

investment. Vietnam’s largest investors include Singapore, South Korea, and China, which are major regional players. Vietnam’s largest investor to date, Singapore, reached an accumulated capital of $9.14 billion, accounting for 29.1% of Vietnam’s foreign direct investment (Briefing). This capital influx was primarily driven by funding for operational projects and Vietnam’s booming industries of electronics, energy, and technology. Moreover,

South Korea is Vietnam’s 2nd highest investor, maintaining a robust presence in tech industries. Notably, Samsung Electronics and LG /dominate Vietnam’s electronics production. China also ranks 3rd among Vietnam’s greatest investors. China’s + 1 strategy allows Chinese companies to diversify their manufacturing sourcing to nations outside of China, where Vietnam’s reduced labor costs attract notable investment opportunities. In 2025, Vietnam experienced a boom in manufacturing, witnessing a surge of 1,381 new FDI projects (Vietnam Briefing). Another reason for China’s +1 strategy was to elude America’s tariffs in Vietnam, reducing total expenses. Furthermore, trade agreements play a major role in expanding Vietnam’s manufacturing industries. Vietnam’s comprehensive network of free trade agreements reached global

markets, covering various services while reducing over 90% of tariffs on goods ( Main Commitments). Amongst them is the Comprehensive and Progressive Agreement for Trans Pacific Partnership, which is a major free trade agreement combining 12 economies across Asia, Europe, and Canada that eliminates tariffs and reduces barriers for economic integration. Moreover, the trade agreement recognises challenges facing small enterprises. As of early 2026, Vietnam has signed over 17 Free Trade Agreements, covering over 60 economies worldwide that drive export-oriented growth and Vietnam’s economic integration

in the global supply chain (Briefing).

Conclusion:

Vietnam’s economic transformation marks a profound shift in its economic and geopolitical role internationally, establishing a powerful presence in supply chains, trade agreements, and the global economy. The integration of the Doi Moi economic reforms in 1986 was critical to Vietnam’s growth, fundamentally altering its trajectory toward a modern, liberalized economy. Vietnam’s surge in foreign direct investment has transformed it into a manufacturing powerhouse, attracting multinational enterprises and corporations. To date, Vietnam’s poverty levels have reduced by over 50% since the 1990s, marking it as one of the world’s largest poverty reduction countries (Vietnam +) . Vietnam’s economic reforms, integration in the global economy, and booming investments mark the testament of economic progress in lifting

tens of millions out of poverty and its growing role in the global economy.

Work cited

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Anh, Kim. “About 1.58 Million Households Live Under Poverty Line in Viet Nam: Report.”

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Briefing, Vietnam. “Vietnam’s Top Investors and FDI Beneficiaries Till November 2024.”

Vietnam Briefing News, 9 Dec. 2024,

www.vietnam-briefing.com/news/vietnams-top-investors-and-fdi-beneficiaries-januar