Vietnam Factory Output Jumps 12% as China-Plus-One Strategy Accelerates

Industrial Production Posts Strongest Growth Since 2022

Vietnam's industrial production rose 12.3% year-over-year in the third quarter of 2025, the fastest pace since late 2022, as multinational manufacturers continued shifting production capacity out of China, according to data released by the General Statistics Office on October 27.

Electronics assembly led the surge, with output in the sector climbing 18.7%. Samsung, which operates six factories in Vietnam employing roughly 100,000 workers, increased production of Galaxy smartphones and memory modules at its Thai Nguyen and Bac Ninh plants.

FDI Commitments Reach $28 Billion

Registered foreign direct investment for the first nine months of 2025 totaled $28.4 billion, a 23% increase from the same period last year, the Ministry of Planning and Investment reported. Disbursed FDI reached $17.6 billion, up 11%.

Notable commitments included a $1.6 billion expansion of LG Display's OLED panel factory in Hai Phong, a $900 million Apple supplier facility by Luxshare Precision in Bac Giang, and a $720 million Lego factory in Binh Duong province.

"Vietnam is the most immediate beneficiary of global supply chain restructuring," said Hien Tran, chief economist at Vietcombank Securities. "The combination of low labor costs, free trade agreements, and proximity to China gives it a structural advantage."

Trade Surplus Widens

Vietnam's trade surplus expanded to $22.1 billion through September, compared to $18.3 billion in the same period of 2024. Exports to the United States grew 16.4%, led by electronics, textiles, and furniture. Total merchandise exports reached $296 billion, on track to surpass $400 billion for the full year.

However, the large trade surplus with the United States — projected to exceed $100 billion in 2025 — has drawn increased scrutiny from Washington. The U.S. Treasury Department's latest currency report placed Vietnam on its monitoring list for potential currency manipulation.

Infrastructure Bottlenecks Emerge

The rapid industrialization is straining Vietnam's logistics infrastructure. Port congestion at Hai Phong and Cat Lai (Ho Chi Minh City) added an average of 3.2 days to container dwell times in the third quarter, according to shipping data from Drewry Maritime.

The government has accelerated investments in transportation. Construction began on the $5.2 billion Bien Hoa-Vung Tau expressway in September, and the Long Thanh International Airport near Ho Chi Minh City remains on track for a partial opening in late 2026.

Labor Market Tightens

Industrial parks in the northern provinces reported vacancy rates below 5%, and factory wages in Bac Ninh and Bac Giang rose an average of 9% year-over-year. The national minimum wage, increased 6% in July to 4.96 million dong ($198) per month for Region I, still significantly undercuts comparable costs in coastal China.

The State Bank of Vietnam held its refinancing rate at 4.5% in October, balancing the need to support growth with concerns about inflationary pressures from a weaker dong, which has depreciated 3.4% against the dollar this year.