Vietnam’s bilateral trade intensity: the role of China

ABSTRACT

This paper aims to study the intensity of trade between Vietnam and its trading partners. Vietnam’s revealed trade preference with a country was found to be negatively correlated with distance, but positively correlated with contiguity, colonial linkages and having a free trade agreement between the pair. At the disaggregate level, contiguity leads to higher revealed export preferences in labour-intensive goods for Vietnam, but this effect on revealed import preferences is less significant. The revealed trade preference indices show that among major trading partners, China’s role is important for Vietnam’s trade, but this role is less dominant than what traditional trade share analysis shows.

KEYWORDS:

• Revealed trade preference
• bilateral trade intensity
• gravity model
• Vietnam
• China

Acknowledgments

We thank the editor and anonymous referees for helpful comments on earlier drafts of the paper.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. The Economist, 22/09/2022, ‘Vietnam is emerging as a winner from the era of deglobalisation’, accessed on 27/02/2023.

2. The 13th National Congress of the Communist Party of Vietnam Resolution February 2021.

3. The Economist, 24/01/2019. ‘The steam has gone out of globalisation’, accessed on 27/02/2023.

4. The 12nd National Congress of the Communist Party of Vietnam Resolution 20–28 January 2016.

5. Foreign Investment Agency – Ministry of Planning and Investment, Foreign Investment Report, Various issues (http://fia.mpi.gov.vn/ChuyenMuc/172/So-lieu-FDI-hang-thang).

6. The Economist, The changes COVID-19 is forcing on to business, 11/04/2020.

7. Preliminary data for 2019 from Vietnam’s General Statistics Office shows the U.S.A. as the largest export market, with 23.2% of total exports.

Additional information

Notes on contributors

Son T. Nguyen

Son Thanh Nguyen is Research Fellow at the Institute of Political Economics, Ho Chi Minh National Academy of Politics, Hanoi, Vietnam.

Yanrui Wu

Yanrui Wu is Professor of Economics, Business School, University of Western Australia, Perth, Australia.