(17 September 2024 – Vietnam) As the preferred secondary destination for supply chains outside of China except in Latin America, Vietnam has rapidly become a crucial player in the global supply chain system according to research carried out by Citi in partnership with East & Partners.
40 percent of CFOs and treasurers indicated that they were either considering or had already moved production to Vietnam.
“There’s no doubt that Vietnam is one of the key beneficiaries of global supply chain diversification strategies” commented Citi Head of Global Network Banking Asia South, N Rajagopal.
“As Vietnam becomes an increasingly significant player in global technology supply chains, we see immense opportunities to work more closely with our multinational clients here.”
“With global trade increasingly impacted by geopolitical tensions, we expect Vietnam to gain more market share and remain a vital hub in production and sourcing chains. Importantly, Vietnam doesn’t necessarily compete with China. As China shifts its focus to value-added manufacturing, conventional manufacturing sectors are moving to ASEAN countries, including Vietnam.”
“Given its proximity to China, Vietnam is well-positioned to strengthen its role in the global supply chain and maintain its high growth trajectory.”
Earlier East research commissioned by Citi found digital uptake of innovative tools for trade remains low however, with only six percent of companies in Vietnam embracing digital uptake. This offers enormous efficiency enhancement benefits in narrowing the gap to their counterparts in China, Singapore and Hong Kong where one in three companies are using new, innovative tools for trade.
“While digital uptake to boost trade remains nascent in the region, the potential is huge. For one, it improves and accelerates supply chain integration, which is important for reacting quickly and efficiently to a bottleneck, staffing problems or restrictions on movement. Digital uptake can also help overcome signs of rising dissatisfaction with trade loans among importers and exporters” commented Citi Managing Director and Global Head, Trade Client Desk, Megha Chopra.