01

This is the latest data, showing that exports in August have once again declined, with a year-on-year decrease of 7.6%.

What's worse, this marks a continuous decline over the past six months, setting a record for the longest consecutive decline since the 2009 financial storm.

Which country is this?

This is Vietnam, a country that last year saw its GDP growth rate exceed 13% due to high export growth.

Vietnam's economy is heavily dependent on exports, to the extent that the export volume is almost equivalent to the GDP.

Faced with the decline this year, Vietnamese officials are also very clear that achieving a 6.5% GDP growth for this year is now almost impossible.

02

Ultimately, the most critical reason is Vietnam's excessive reliance on the U.S. market for its exports, with the U.S. being Vietnam's top export market.

In the past years of 2021 and 2022, Vietnam's exports to the U.S. have shown steady growth, which has also led to great confidence in Vietnam's manufacturing sector. They believed that they could maintain positive growth in the face of adversity caused by the pandemic, and thus the potential for growth in favorable conditions would only be greater.So last year, Vietnam's manufacturing industry continuously increased investment, expanded production lines, and hired more employees.

Advertisement

But unexpectedly, the United States changed its mind, and demand suddenly shrank significantly, and orders were abruptly canceled.

In the first eight months of 2023, Vietnam's exports to the United States actually decreased by as much as 19% year-on-year.

At the same time, overseas funds that had actively invested in Vietnam's manufacturing industry in the previous two years seemed to flee the Vietnamese market in an instant.

Referring to China's experience, Vietnam learned a lesson that over-reliance on the American market is equivalent to handing the fate of the country to the United States.

Looking back, Vietnam increasingly realizes that actively expanding the Chinese market is very important.

03

Vietnam also wants to transform towards higher-end manufacturing. In the field of new energy vehicles, Vietnam not only thinks so but also does so.

Now, Vietnam has finally made some progress in electric vehicle manufacturing, that is, Vietnam's electric vehicle manufacturer VinFast was finally listed on the US Nasdaq in late August.

This is undoubtedly great news for Vietnam.Unfortunately, after the initial few days of increase, the capital market has begun to recognize Vietnam's shortcomings in the manufacturing of new energy vehicles, leading to a significant drop in the stock price of this listed company. In the continuous decline over the past four trading days, the market value has decreased by $146.5 billion, which is equivalent to 1 trillion yuan in stock assets being evaporated in just four days. Clearly, Vietnam needs to face up to its deficiencies in the new energy vehicle industry chain.

This company, within just two weeks of going public, once reached a maximum market value 2.5 times that of BYD's total market value. Why has it fallen now? Vietnam's layout in the new energy vehicle industry is far behind ours, hence Wall Street is not very optimistic about the long-term development of this company. How could this company's market value reach 2.5 times that of BYD's? Investors finally realized that the valuation was too high and the risk was too great, leading to a rapid withdrawal of funds.

Previously, BYD had already established a factory in Thailand and later planned to build a new factory in Vietnam. If this plan is realized, the related supporting and upstream and downstream development must also be within BYD's consideration. This would be a huge help for Vietnam's new energy vehicle industry chain. It is quite clear that for Vietnam, actively integrating into China's industry chain is the only way to have its own development space.