Leave Vietnam out of that question.

Vietnam’s exports massively outperformed its peers’ over the 12 months through January, growing 15% on-year at a time when shipments from many members of the Association of Southeast Asian Nations were falling. Vietnam’s trade data for March is due out this week.

“Vietnam is benefiting from a lot of regional themes right now,” HSBC economist Trinh Nguyen said.

Low wages are attracting manufacturers looking for cheaper locations than China, where labor costs are rising quickly. Vietnam’s demographics are promising and literacy rates are relatively high, producing a workforce with the drive and skills for factory labor.

And as neighboring Thailand implodes, Vietnam appears a beacon of stability by comparison. Say what you will about the political or economic management skills of Vietnam’s Communist rulers, but the party’s grip on power appears secure.

“If you’re a foreign firm trying to offshore your production, one of your considerations is whether or not the people in power, the decision-makers, will stay the same,” Ms. Nguyen said.

Domestic demand in Vietnam has suffered in recent years as authorities tightened monetary policy to fight inflation that had soared above 20%. That has made exports a more important driver of growth, just as massive investments by the likes of Intel, Samsung and others have boosted Vietnam’s role in the electronics supply chain.

Vietnam has especially benefited from two trends in electronics production, ANZ Bank economist Devika Mehndiratta said. For one, while demand from the United States and Europe has generally been weak, electronics sales are soaring in China.

Despite concerns about China’s economic slowdown, “so far it has proved to be at least a small support factor for Asean exports because of its strong demand for electronics,” Ms. Mehndiratta said. Just under 9% of Vietnam’s exports go to China, according to ANZ.

Second, even in the United States, where overall electronics imports were flat last year, imports of telecom equipment were a growth area – and handsets are one area where Vietnam has specialized. The U.S. takes nearly 14% of Vietnam’s exports — the highest rate in Asia — putting it just behind the European Union as one of Vietnam’s largest trading partners.

“Vietnam just happens to be in the sweet spot in terms of electronics,” Ms. Mehndiratta said. “In the last five or six years, from pretty much nothing, that has taken off hugely.”

Vietnam’s electronics exports jumped nearly 68% in 2012, and another 35% in 2013. Exports of phones grew by 85% and 67% in those two years.

Of course, given the high statistical base that’s been established, that pace is sure to fall. And plenty of challenges remain: Vietnam is just beginning to clean bad loans out of its banking system, a process that will take years. And given the government’s struggles to keep the economy on an even keel in recent years, it wouldn’t come as a great shock to see inflation spin out of control again.

Still, Vietnam seems likely to grab an ever-greater export share as the search for cheaper alternatives to China gathers pace. HSBC’s manufacturing PMI for Vietnam shows output rising and inventories at low level, meaning new orders should quickly feed through to production. The bank expects Vietnam’s exports to grow by 20% this year.

With a population of about 90 million who don’t yet earn enough to support a thriving domestic market, “the way for Vietnam to grow in terms of income and productivity is to supply goods to richer countries,” Ms. Nguyen said. “As you’ve seen in China that strategy can’t go on forever, but for the next decade at least it can continue.”

By Michael S. Arnold - The Wall Street Journal - March 25, 2014