China’s zero-Covid policy is driving global tech manufacturers and exporters to shift away from the country’s tech capital of Shenzhen. They are finding alternative destinations such as Vietnam, especially during the first months of this year when China’s cities are imposing lockdown measures to contain the Covid epidemic.

Statistical data released by both Shenzhen and Vietnam helps reflect this movement of a shift in global supply chains.

Yicai Global citing China’s customs data reported that Shenzhen’s exports were estimated at 120 billion yuan, or 18.3 billion US dollars, in March, falling 14% from the same period last year.

Meanwhile, Vietnam’s exports are nearly double those of China’s tech capital.
Data from Vietnam’s General Statistics Office shows that the country’s exports of goods reached 34.06 billion dollars, up 14.8% year on year.

For the first quarter of 2022, Vietnam’s exports were valued at $88.58 billion, up 12.9% over the same period last year. That figure is about 46% higher than Shenzhen’s exports.

Notably, Vietnam’s tech products, such as cell phones, computers, and electronic components, have become the country’s biggest category of exported goods. They earned $28.1 billion, contributing to 32% of Vietnam’s total first-quarter exports.

Vietnam’s exports overtook Shenzhen’s shipments in 2018 for the first time in 30 years, following the U.S.-China trade war. However, the gap between the two has grown since then.

Samsung Electronics, LG, Intel, Apple, and other tech giants have been slowly moving their production lines out of China and seeking alternative manufacturing sites, including Vietnam. As a result, exports of some major Chinese products have dropped significantly.

Chen Jing is vice president of the Technology and Strategy Research Institute under China’s University of Science and Technology. He said that Vietnam has taken over many of China’s overseas orders in the last decade as global supply chains seek cheaper labor costs.

However, he said that this does not affect China’s own fast-growing exports but, by contrast, helps enhance the relationship between the two nations.

Chen said that Vietnam imports raw materials or parts from China for assembly export.

China is Vietnam’s largest trade partner and second-biggest export destination.
According to China’s General Administration of Customs, bilateral trade between the two countries surged 19.7% to 230.2 billion in 2021, and China ran a trade surplus of 45 billion dollars with Vietnam.

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