Vietnam is actively seeking to diversify its trade partnerships, but experts warn that this strategy alone won't reduce its heavy reliance on imports. In August 2026, Vietnam's President To Lam and other officials visited Australia and New Zealand, securing pledges to boost bilateral trade. Australia aims to raise trade with Vietnam to US$20 billion, while New Zealand targets US$3 billion. These efforts are part of Vietnam's broader push to reduce dependence on China and the United States, its two largest trade partners.
Despite these initiatives, Vietnam's trade with China and the US remains overwhelmingly dominant. In 2025, bilateral trade with China reached US$256.4 billion, while trade with the US stood at US$172.5 billion. Experts argue that diversification efforts are necessary but insufficient without strengthening domestic firms' capabilities. Vietnam's reliance on imported inputs and its high Incremental Capital-Output Ratio highlight the need for better capital allocation and skill development.
To address these challenges, Vietnam has introduced key policy measures. Resolution 68, issued in May 2025, aims to position the private sector as the economy's driving force, improving access to capital and fostering links with transnational corporations. Another resolution in June 2026 seeks to raise localisation rates and develop domestic firms within foreign direct investment supply chains. These steps are crucial for turning global integration into stronger domestic productive know-how.
The real test for Vietnam will be whether its firms can move beyond low-value tasks in the coming years. While trade diversification can widen access to technologies, the evidence suggests that firms must first have the capacity to absorb and adapt new knowledge. Without addressing domestic skills development, spreading inefficiencies across more trade partners will not solve the underlying issue.