With the trade war between the US and China continuing to escalate, a clear winner is starting to emerge: Vietnam. Since around the middle of last year, Vietnam’s exports to the US have shot up by around 50% in seasonally-adjusted terms, as US demand has shifted away from China towards alternative suppliers. Low labour costs, political stability, an improving business environment, and its close integration into the supply chains of southern China are just some of the advantages Vietnam offers to potential investors. Whereas most countries in Emerging Asia are seeing their exports decline in y/y terms, exports from Vietnam have grown strongly this year. The improving prospects for exports are prompting us to upgrade our growth forecasts for this year. We now expect the economy to expand by 6.5% in 2019, up from 6.0% previously.
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