Vietnam has earned the attention, but the lazy China+1 story is too neat.
For UK manufacturers, Vietnam may be a credible assembly and growth-market option. It is weaker as a fully independent substitute for China when upstream inputs, rules of origin and route resilience are tested together.
What changed
The UK now trades with Vietnam through both the UK-Vietnam FTA and CPTPP. UK guidance also confirms CPTPP-related conformity-assessment routes that can reduce testing friction where the destination market accepts the relevant UK body. That improves market access, but it does not remove the operating question.
The issue is role clarity
Vietnam can play different roles: demand market, final assembly base, component sourcing location or regional service hub. Each role has a different risk profile. Treating all of them as China+1 creates a false sense of certainty.
The dependency test
Porter’s Diamond is useful only if narrowed. Factor conditions, supply industries, demand conditions and government context should be tested against the exact role Vietnam is meant to play. A final-assembly case may work even when deep component localisation is thin. A substitution case may not.
The worked example
A UK industrial-components firm considering Vietnam should ask whether the product relies on Chinese inputs, whether the final good can qualify for preferential treatment, whether testing can be done through a recognised route and whether shipment timing to Europe remains acceptable under current routing conditions.
Boundary. This is a commercial framework, not customs, tax, legal or financial advice. A company-specific position needs current official guidance, product codes, supplier evidence, customer terms and specialist review.
