For most of its modern economic history, Vietnam has run a simple but effective playbook: keep labor costs low, welcome foreign factories, plug into global supply chains, and export at scale. It worked spectacularly. A country that was one of Asia’s poorest in the 1980s became one of its fastest-growing economies, lifting tens of millions out of poverty in a single generation.
But 2025 may be the year that model started showing its age.
The assembly-line economy
Vietnam’s growth has been built on what economists call export-led, FDI-driven industrialization. The formula is straightforward: attract multinational companies with tax incentives, cheap land and competitive wages, then let them build factories that employ local workers and generate export revenue.
Samsung alone accounts for roughly a quarter of Vietnam’s total exports. Apple, Intel, LG and dozens of other multinationals have made Vietnam a critical node in global electronics supply chains. This is why Vietnam’s exports look so impressive on paper, electronics, machinery and technology products dominate the basket.
The problem is that most of the value in these products does not stay in Vietnam. The components are imported, assembled by Vietnamese workers, and shipped out. Vietnam earns the assembly fee. The intellectual property, the brand, the margins and the profits flow elsewhere.
What 2025 revealed
Three data points from 2025 crystallize the problem.
First, foreign-invested enterprises generated 72% of Vietnam’s total trade and contributed 99% of all trade growth. Vietnamese domestic companies barely moved. This means the entire record-breaking $920 billion in turnover was essentially a foreign story happening on Vietnamese soil.
Second, imports grew faster than exports, 18% versus 15.9%, shrinking the trade surplus to $21.18 billion from $28.11 billion in 2023. When a country’s exports depend heavily on imported inputs, any acceleration in production automatically pulls in more imports. The trade surplus, Vietnam’s traditional buffer, is eroding.
Third, the surplus as a share of total trade fell for the third consecutive year, to just 2.3%. The economy is generating less net value per dollar of trade even as the headline numbers hit records. Running faster, going slower.
The missing middle
What Vietnam largely lacks is the middle layer that makes export-led growth sustainable over the long term: a domestic industrial base capable of supplying inputs, moving up the value chain and competing internationally on its own terms.
South Korea and Taiwan went through a similar phase decades ago, but they invested heavily in building domestic champions, Hyundai, Samsung in its early form, TSMC, companies that started as assemblers and became global technology leaders. Vietnam has not yet produced that generation of companies, and the window to do so is not unlimited.
Why this matters now
Two external pressures are compressing Vietnam’s timeline. The first is US tariff policy. Businesses in 2025 rushed to stockpile imported components precisely because they feared tariff disruptions, which temporarily inflated both imports and the appearance of supply chain fragility. The second is automation. The low-wage assembly model that Vietnam built its growth on is increasingly vulnerable to robotics, which does not need a visa or a dormitory.
The agricultural counterpoint
There is one sector that offers a glimpse of a different model. Agriculture and seafood exports grew 15.2% to $19.8 billion in 2025, driven by Vietnamese-owned companies, using domestically produced inputs, selling branded products to international markets. The value stays in Vietnam. The farmers, processors and exporters are Vietnamese. This is what genuine export competitiveness looks like, and it points toward what the rest of the economy needs to become.
The road ahead
Hanoi has acknowledged the problem explicitly. Official policy for 2026 to 2030 calls for a shift from volume to value, from FDI dependence to domestic industrial capacity, from assembly to innovation. The buzzwords are green economy, digital economy and knowledge economy.
Turning policy language into structural change is the hard part. It requires sustained investment in education, research and development, industrial policy and domestic company support over a decade or more. Vietnam has done difficult things before. The question is whether it can make this transition before the current model exhausts itself.
The $920 billion record is proof of what the old model can achieve. Whether Vietnam builds something more durable on top of it is the defining economic question of the next decade.
