Vietnam export boom masks deepening trade surplus split between local and foreign firms

KUALA LUMPUR, 22 JULY 2026 —

KUALA LUMPUR, July 21 — Vietnam’s export earnings surged to $430.2 billion in the first 11 months of 2025, a 16.1% year-on-year increase, putting full-year exports on track to exceed $470 billion, according to the Ministry of Industry and Trade.

The 2020–2025 period marked a decade of robust growth for Vietnam’s trade sector, with average annual export growth of around 10%, propelling the country into the top 20 global exporters by 2023. Vietnam has maintained a trade surplus for 10 consecutive years, bolstering foreign reserves and macroeconomic stability amid global economic turbulence.

Despite concerns over U.S. retaliatory tariffs earlier in 2025, actual rates imposed were lower than anticipated, aligning with levels applied to comparable exporters. While sectors like seafood faced challenges, Vietnam’s overall export competitiveness in the U.S. market remained intact.

However, the headline growth obscures a deeper structural imbalance. Domestic enterprises contributed just $102 billion in export revenue in the first 11 months of 2025, down 1.7% year-on-year, accounting for less than 24% of total exports. In contrast, foreign-invested enterprises (FDI) generated nearly $328 billion, a 23% increase, representing over 76% of exports.

FDI’s share in Vietnam’s exports has risen steadily from 55% in 2010 to 76% by late 2025, meaning over three-quarters of export earnings now come from foreign firms. This trend reflects Vietnam’s reliance on an "assembly-for-export" model, where 89% of export revenue stems from processed industrial goods, while 93% of imports are capital goods, machinery, and raw materials.

Vietnam recorded a trade surplus of $20.5 billion in the first 11 months of 2025, entirely driven by FDI firms, which posted a $46.5 billion surplus. Domestic companies, meanwhile, ran a $26 billion deficit, highlighting their dependence on imported inputs and limited integration into global value chains.

High global interest rates have also led to profit repatriation by FDI firms, limiting their contributions to domestic capital accumulation. Rising protectionism, geopolitical instability, and stricter sustainability standards in major markets further pressure Vietnam’s small and medium-sized enterprises (SMEs), which often lack the resources to meet global benchmarks.

Economists warn that Vietnam’s growth model, while impressive in volume, lacks depth. Local firms remain absent from high-value segments, with limited capabilities in design, branding, and international marketing. The reliance on imported raw materials and components leaves the economy vulnerable to external shocks.

Looking ahead, Vietnam faces the challenge of transitioning from export-led growth to higher domestic value-added production. Structural reforms are needed to develop supporting industries, strengthen SMEs, and expand service exports, where Vietnam still runs an annual deficit of $10–12 billion despite goods surpluses.

As economist Le Duy Binh noted, Vietnam cannot sustain growth solely through export volumes. Without deeper reforms, today’s export records risk becoming tomorrow’s economic burdens.