|Garment products manufactured at Hoa Tho Garment and Textile Company in central Quang Tri Province for export. HSBC said Viet Nam's trade flows would gradually pick up in the second half of this year. — VNA/VNS Photo Danh Lam
HCM CITY (VNS) — Having stuttered in the year's first half on subdued global demand, Viet Nam's trade flows are expected to gradually pick up in the second half of 2013, HSBC has said in a report.
Nearly half of the country's exports went to advanced economies, a higher proportion than for Indonesia, Malaysia, and Bangladesh.
This should help Viet Nam recover since demand was accelerating in the advanced economies, particularly in the US, its largest export partner.
Clothing and apparel was its largest export sector, helped by wage competitiveness; this sector would contribute 20 per cent of the increase in exports until 2020.
Since signing a bilateral trade agreement with the US in 2000 and joining the WTO in 2007, Viet Nam had become the second largest supplier of clothing and footwear to the US behind China.
Exports of clothing and apparel to the US and Europe were expected to grow at a double-digit pace until 2015.
As the middle class expands, Viet Nam's imports would become increasingly consumer-orientated.
Viet Nam was located in the world's most dynamic trading region and had established a strong foothold in clothing and apparel and telecom.
The demographic trend was very favourable and a long-term growth of more than 5 per cent annually was anticipated.
A rising middle class across Asia would help drive strong trade flows from Viet Nam to the rest of emerging Asia.
The ASEAN-China Free Trade Area (ACFTA) would pay dividends, with Viet Nam's exports to the rest of Asia (excluding Japan) growing by more than 15 per cent per year in 2013-20.
China was expected to be Viet Nam's fastest growing destination for exports through 2030, and India and Bangladesh would be Viet Nam's fastest growing import partners with industrial machinery making up a lion's share of their imports.
Trade between Viet Nam and Malaysia would also become increasingly important. Malaysia's fast growth in the same headline sectors, notably industrial machinery and ICT equipment, would contribute to exports from the country to Malaysia growing by more than 15 per cent per annum in 2016-30. But the US was expected to rank as Viet Nam's second largest export partner by 2030 behind China.
Though the country's infrastructure was still poor, progress was being made, with its rating in HSBC's Asia Infrastructure Measure (AIM) improving from under 0.28 in 2000 to 0.37 in 2012. •
This year more than 40 per cent of imports would be infrastructure-related and by 2030 this share will rise to around 60 per cent. —VNS