Foreign-owned factories earn most export revenue
Vietnam's anchor is external. Foreign-invested manufacturers generate most export revenue and a large share of formal employment, with electronics and technology hardware at the core of the export base. The anchor is held by firms whose location decisions weigh relative cost, infrastructure, labour availability and policy predictability.
Production answers to orders placed abroad
Demand is set abroad. The economy is organised around processing imported components into exported goods, so production responds to global orders. Household consumption grows as manufacturing wages raise incomes and remittances supplement households, but domestic demand sits downstream of export activity.
Foreign investment brings the capital; banks serve domestic firms
Foreign direct investment is the principal capital input and the channel through which technology, management practice and market access enter. Export earnings flow into wages, which feed domestic consumption. The domestic financial system is bank-centred and serves domestic firms and state-owned enterprises, largely separate from the foreign-invested manufacturing that anchors the system.
Rising wages set the pace of the move to higher-skill work
The binding constraint is the relationship between wages and productivity. Labour cost is the basis of the anchor, and wages rise as the economy develops, so the system depends on moving into higher-skill production at the pace wages advance. Labour supply and infrastructure are concentrated in the northern and southern corridors, which sets where and how fast new investment can locate.