The Impacts of China's Rise on Vietnam's Export Performance during the period 2000-2012

Abstract

    This paper examines the impacts of China s rise in world trade on Vietnam 's expori performancefocusing on trade displacement effects in the Ihird-country markets and opportunities for exportinglo the expanding market in China. The analysis is based on estimation of trade similarity andcomplementarity indices using annual data for the period 2000-2012. The findings suggest thatthe trade displacement effect was significant in Japanese market, but less severe than commonbelief in all other markets. There is also evidence that Vietnam has so far failed to benefit fullyfrom opportunities lo expori to the growing Chinese market. This was mainly because Vietnam sexports to China were predominantly driven by specific country bias in favour of Vietnam ratherthan complementarity between Vietnam s export and China's import patterns. For parts andcomponents which are emerging trend of word exports, the level of displacement effect waslower than that on final goods and the rapid integration of China into production networks wasnot in favor of Vietnam exports in the product line.