BANGKOK: The economic relationship between Thailand and Vietnam, neighbouring Asean countries, is shifting from trade partners to direct rivals on the global economic stage amid production relocation and changes in global supply chains.
The IMD World Competitiveness Ranking 2025 said Thailand fell five places to 30th in the world because of problems in government efficiency, infrastructure and labour productivity, while Vietnam, although not yet included in the IMD ranking, is being watched as an “ASEAN economic rising star” that is rapidly gaining speed.
Thailand’s strengths still lie in one of the region’s strongest transport and logistics ecosystems, with a logistics costs-to-GDP ratio of 13.5%, according to Thailand’s Logistics Report 2024 by the National Economic and Social Development Council.
Thailand also retains advantages in road infrastructure, PPP investment and its role as a regional headquarters hub for multinational companies.
However, key constraints remain bureaucratic delays, a lack of unity in administration and uneven investment in artificial intelligence (AI) technology.
By contrast, Vietnam is building new advantages through major infrastructure investment.
Vietnam’s 2030-2050 transport strategy says the country expanded its expressway network from just 89km in 2010 to more than 3,000km in 2025 and aims to reach 5,000km in 2030.
It is also pushing ahead with a north-south high-speed railway project worth more than US$67.34 billion, connecting Hanoi and Ho Chi Minh City over 1,541 kilometres, to link supply chains from southern China to a new global manufacturing base.
Thailand, meanwhile, is accelerating the Land Bridge project, worth nearly THB1 trillion, linking Chumphon and Ranong to upgrade the country into a gateway between the Indian and Pacific oceans.
However, it still faces a key challenge in the speed of project implementation.
Another factor making Vietnam an investment magnet is its population and labour structure.
Vietnam has more than 100 million people, an average age of just 30 and an average minimum wage of US$200-US$350 a month, lower than Thailand’s roughly US$300-US$500 a month, while Thailand is entering an ageing society and facing labour shortages.
Transparency International’s 2025 Corruption Perceptions Index (CPI) also paints a clear contrast.
Vietnam rose to 41 points and 81st in the world, supported by the “Blazing Furnace” anti-corruption policy.
Thailand fell to 33 points and 116th in the world, amid feedback from more than 89.1% of Thai businesses that see corruption as a major obstacle to investment, according to a survey by the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB).
That momentum has prompted global giants to continue establishing a presence in Vietnam, including Samsung, which invested in a US$220 million R&D centre in Hanoi; LG Electronics, which moved its TV production base from Thailand; and Apple and LG, which continue to expand production.
This reflects a “Dual-Market” strategy in which Thailand is used as a management and research centre, while Vietnam serves as a large-scale, low-cost production base.
Taken together, these trends show that today’s Thailand-Vietnam competition is not only about production costs, but also a structural contest for the future role of “Asean’s new economic centre”.
At the same time, Thailand-Vietnam economic relations are reaching an important turning point.
From competing in exports and manufacturing bases, the two countries are moving towards deeper regional supply-chain links amid pressure from the trade war, production relocation and global technology competition.
Commerce Ministry data indicates that Vietnam is now Thailand’s sixth-largest trading partner globally and second-largest in Asean after Malaysia.
The two countries have set a target of lifting bilateral trade to US$25 billion by 2026 through the “Three Connects” strategy, which seeks to link supply chains, local economies and joint green growth.
In terms of competitive potential, Thailand still retains advantages in infrastructure, logistics systems and integrated industries, especially vehicles, processed food, petrochemicals and upstream supply chains.
The Eastern Economic Corridor (EEC) also remains a key magnet for investment in data centres, EV supply chains and advanced technology.
Vietnam, meanwhile, is being watched as an Asean economic rising star, with several financial institutions forecasting average GDP growth of 6.2%-7.5% during 2025-2026, among the highest rates in the region.
Growth is being driven by electronics, semiconductors, mobile phones and computers, as well as production relocation from China by global giants.
Another major strength of Vietnam is its participation in several free trade agreements (FTAs), including the CPTPP and EVFTA, which open doors to European and North American markets.
This has made Vietnam a key global export base for technology goods, including computers, mobile phones, machinery, textiles and footwear, reflecting its shift from a low-cost production base to an advanced technology manufacturing base.
On investment, the two countries are beginning to expand their connected roles.
The Thailand Board of Investment (BOI) said Vietnamese investors are increasingly interested in investing in Thailand, especially in clean energy, food, logistics, data centres, digital businesses and EV industries, in line with Thailand’s BCG Economy approach and Net Zero target.
At the same time, rising industries in which Thai investors are accelerating investment in Vietnam include semiconductors, renewable energy, e-commerce, logistics and healthcare, especially semiconductors and smart electronics, which are being supported by global technology companies.
Kriengkrai Thiennukul, honorary chairman of the Federation of Thai Industries (FTI), told Thansettakij that Thailand’s overall competitiveness compared with Vietnam is now starting to fall behind.
Although Vietnam still has weaknesses in its insufficient and unstable electricity supply, the Vietnamese government is continuously trying to address the problem.
Vietnam’s export value has already overtaken Thailand’s.
Although its GDP remains lower than Thailand’s, foreign direct investment (FDI) is clearly higher.
If Vietnam continues to maintain its growth rate while Thailand fails to adjust in time, Vietnam’s GDP could overtake Thailand’s in future.
Vietnam’s key strength is its large working-age labour force, unlike Thailand, which has fully entered an ageing society.
Thailand still has an advantage in energy because it has sufficient electricity and is continuing to increase the share of clean energy, an important factor in attracting high-technology industry investment.
Vietnam is accelerating clean-energy development to compete for investment in advanced electronics, chips and data centres, with Singapore, Malaysia and Thailand as key regional competitors.
However, Thailand and Vietnam remain both “rivals and trade partners” that increasingly need to depend on each other amid global geopolitical problems.
Thailand is Vietnam’s largest trading partner in Asean, and many Thai investors have invested in Vietnam.
“Asean is becoming an important global production base in place of China. Therefore, instead of competing with one another alone, Asean countries should join hands as partners to increase bargaining power and build collective strength,” Kriengkrai said. - The Nation/ANN
