Vietnam’s bilateral trade intensity: the role of China

Abstract

This paper aims to study the intensity of trade between Vietnam and its trading partners. Vietnam’s revealed trade preference with a country was found to be negatively correlated with distance, but positively correlated with contiguity, colonial linkages and having a free trade agreement between the pair. At the disaggregate level, contiguity leads to higher revealed export preferences in labour-intensive goods for Vietnam, but this effect on revealed import preferences is less significant. The revealed trade preference indices show that among major trading partners, China’s role is important for Vietnam’s trade, but this role is less dominant than what traditional trade share analysis shows.