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A striking warning from Thailand’s business community, and a reminder of how quickly Vietnam is reshaping the regional landscape
According to the Thai Chamber of Commerce in Vietnam (ThaiCham), Thailand is at risk of losing its competitive edge as Vietnam continues to surge ahead in foreign investment and high-tech manufacturing. FDI into Thailand fell to USD 32 billion in 2024, compared with USD 38 billion for Vietnam — a gap that ThaiCham described as a potential “nightmare scenario” if left unaddressed.
What’s driving Vietnam’s momentum?
A unique FTA advantage
According to the WTO and the International Trade Centre, Vietnam now has 17 Free Trade Agreements (FTAs), the second highest in Southeast Asia after Singapore. This gives manufacturers in Vietnam preferential access to key global markets — a structural advantage that reinforces the country’s appeal beyond low costs alone.
Infrastructure investment to unlock efficiency
Vietnam is accelerating major infrastructure upgrades — highways, deep-sea ports, logistics hubs — with the aim of reducing logistics expenses from ~17% of GDP today (vs. ~12% regional average). Lower logistics costs will further enhance competitiveness and attract more high-quality FDI.
A strategic push into high-tech and semiconductors
Vietnam’s ambition to position itself as a high-tech and semiconductor production hub is already visible through rising commitments from top global manufacturers.
Vietnam’s combination of FTA depth, infrastructure upgrades, political stability, and supply-chain diversification tailwinds is creating a real competitive repositioning within Southeast Asia.
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Picture credit to WTO, International Trade Center and KPMG “Vietnam 2026 Outlook”
