Vietnam’s role in global supply chain rising amid Covid-19

The Covid-19 pandemic has disrupted but not restrained Vietnam’s growing role in the global supply chain, according to Mr. Adam Sitkoff, Executive Director of the American Chamber of Commerce (AmCham) in Hanoi.

In the context of the recent sharp increase in the number of Covid-19 infections, Vietnam has faced difficulties in production and export activities, which are among the key activities in maintaining the international trade of Vietnamese products such as apparel, computer chips, and automobiles. Despite the supply chain being affected by the pandemic, he said, Vietnam’s economy will still perform well. Moreover, the country will become a more important part of the global supply chain, especially in terms of products that have an influence on American consumers.

Though Covid-19 has created obstacles for Vietnam’s role in the supply chain and the proportion of people being fully vaccinated is still at less than 3 per cent, Mr. Sitkoff believes that Vietnam will continue to attract investment, including investment moving out of China. He also emphasized that Vietnam’s economic growth was 2.9 per cent last year, which was the best rate in Asia. AmCham’s main goal at this point, he said, is to ensure that Vietnam’s anti-pandemic policies “cause as little disruption to business as possible”, as many companies are looking to find smooth delivery before the year-end shopping season.

In addition, a report from the Australia and New Zealand Banking Group Limited (ANZ) released on September 7 has a similar view, stating that the long-term outlook for the Vietnamese economy remains positive, despite the current deep decline in domestic demand. The pandemic has not changed the attractiveness of Vietnam as a manufacturing hub. There is still plenty of room for policy support to further accelerate economic recovery.