HANOI MULLS PLAN B AMID ES­CA­LAT­ING CHINA-US TRADE WAR

Southeast Asia Globe - - Agenda -

As the trade war between China and the US con­tin­ues to ramp up, Vietnam has be­gun seek­ing av­enues for pro­tect­ing it­self against the reper­cus­sions, with the two coun­tries cur­rently serv­ing as its largest ex­port des­ti­na­tions.

A re­port by the coun­try’s Na­tional Cen­tre for So­cioE­co­nomic In­for­ma­tion and Fore­cast un­der the Min­istry of Plan­ning and In­vest­ment high­lights the po­ten­tial cost to the coun­try of the trade wars, and of­fers sug­ges­tions for an­tic­i­pa­tory mea­sures. De­tails of the re­port have not been re­leased to the pub­lic.

Min­istry rep­re­sen­ta­tives con­firmed that the con­cern is that the con­tin­u­ing trade bat­tle could re­duce Viet­namese ex­ports and the in­flow of for­eign in­vest­ment, hurt­ing lo­cal pro­duc­tion.

The po­ten­tion vul­ner­a­bil­ity comes as the coun­try’s econ­omy is un­der threat due to weak­en­ing stocks and cur­rency while in­fla­tion surges.

One sug­ges­tion for coun­ter­bal­anc­ing these vul­ner­a­bil­i­ties is for the cen­tral bank to con­sider de­valu­ing the Viet­namese dong against the US dol­lar in or­der to in­crease the com­pet­i­tive­ness of Viet­namese prod­ucts, the Vietnam In­sti­tute for Eco­nomic and Pol­icy Re­search sug­gested last month.

WViet­namese work­ers at a fac­tory in Ho Chi Minh City

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