How Viet­nam gained from China’s ex­pe­ri­ence

Global Times US Edition - - ASIANREVIE­W - By Zhu Zhen­ming

It is spec­u­lated that Viet­nam, fol­lowed by coun­tries such as China, In­dia and Mex­ico, would be the next tar­get of the US gov­ern­ment’s sanc­tions spree. Why has Hanoi grabbed US Pres­i­dent Don­ald Trump’s at­ten­tion? Viet­nam’s re­mark­able eco­nomic growth is one of the rea­sons.

Viet­nam has a weak eco­nomic foun­da­tion. Though be­ing an im­por­tant pro­ducer of rice, Viet­nam once faced prob­lems even feed­ing its peo­ple. In 1986, this South­east Asian coun­try im­ple­mented doi moi, an “open door” mar­ket-ori­ented pol­icy that has helped it grow rapidly.

Viet­nam’s econ­omy has been grow­ing at a high rate es­pe­cially in the past decade, with the GDP clock­ing a growth of 7.08 per­cent in 2018, the high­est since 2008.

Ac­cord­ing to the Gen­eral Sta­tis­tics Of­fice of Viet­nam, in 2018, the agri­cul­ture, forestry and fish­ery sec­tors grew by 3.76 per­cent, the in­dus­try and con­struc­tion sec­tor 8.85 per­cent and the ser­vices sec­tor 7.03 per­cent. The poverty rate in 2018 was 6.8 per­cent, a drop of 1.1 per­cent­age point from 2017. Viet­nam is lift­ing it­self out of poverty to en­ter the ranks of low-to-mid­dle in­come coun­tries.

What has con­trib­uted to Hanoi’s rapid eco­nomic de­vel­op­ment?

First, the Viet­nam gov­ern­ment has set a clear goal of de­vel­op­ment. The Eighth Na­tional Congress of the Com­mu­nist Party of Viet­nam (CPV) in 1996 set up the goal of mak­ing the na­tion a mod­ern and in­dus­tri­al­ized coun­try by 2020. The 12th Na­tional Congress of the CPV in 2016 drafted a five-year plan with a GDP growth tar­get of 6.5-7 per­cent from 2016 to 2020. GDP per capita is ex­pected to be be­tween $3,200 and $3,500 by 2020.

The clearly crafted aim, the united lead­er­ship of the CPV and the Viet­namese gov­ern­ment, and the top-to-bot­tom ex­e­cu­tion guarantee the re­al­iza­tion of the goal.

Sec­ond, Viet­nam has been flex­i­ble

in ap­ply­ing China’s re­form and open­ing-up ex­pe­ri­ence, keep­ing view of its re­al­i­ties. Ev­ery time China holds the Na­tional Congress of the Com­mu­nist Party of China, is­sues im­por­tant eco­nomic poli­cies and in­tro­duces im­por­tant re­forms, Viet­nam care­fully stud­ies the Viet­namese trans­la­tion.

Viet­nam has sent of­fi­cials on study tours to China sev­eral times. By learn­ing from China’s ex­pe­ri­ence, Hanoi has avoided pos­si­ble mis­takes and de­tours, and its econ­omy has grown rapidly. Hanoi’s so­cial­ism-ori­ented mar­ket econ­omy, with poli­cies tar­geted at giv­ing state-owned en­ter­prises the lead­ing role and en­cour­ag­ing pri­vate en­ter­prises, re­flects the ex­pe­ri­ence of China’s re­form and open­ing-up.

Fur­ther­more, Viet­nam’s for­eign pol­icy has won it more friends. In the do­main of eco­nomic co­op­er­a­tion, Viet­nam proac­tively in­te­grated into the in­ter­na­tional com­mu­nity. It has signed agree­ments, such as the Com­pre­hen­sive and Pro­gres­sive Agree­ment for Trans-pa­cific Part­ner­ship and the Eu­viet­nam Free Trade Agree­ment, which has given a fil­lip to open­ness in the econ­omy. Hanoi pays great at­ten­tion to at­tract­ing for­eign in­vest­ment and de­vel­op­ing man­u­fac­tur­ing and other in­dus­tries, mir­ror­ing the ex­pe­ri­ence of other de­vel­op­ing coun­tries.

Hanoi’s strength lies in its pref­er­en­tial poli­cies for for­eign cap­i­tal, low la­bor costs and cheap in­dus­trial raw ma­te­ri­als. Cur­rently, com­pa­nies mak­ing in­te­grated cir­cuits and chips such as Sam­sung and In­tel and firms own­ing la­bor in­ten­sive busi­nesses, like adi­das and Uniqlo, have en­tered Viet­nam. For­eign in­vest­ment brings in cap­i­tal and ad­vanced tech­nol­ogy and also cre­ates wealth and em­ploy­ment op­por­tu­ni­ties. It also drives the de­vel­op­ment of for­eign trade.

In sum, af­ter years of ef­forts, the Viet­namese econ­omy has en­tered a new phase. How­ever, the af­ter­math could be more daunt­ing. Viet­nam’s econ­omy has some struc­tural prob­lems which could ag­gra­vate if the coun­try en­ters a new era. It re­mains to be seen whether Hanoi would be able to over­come them. The au­thor is a re­search fel­low at China (Kun­ming) Academy of South and South­east Asian Stud­ies. opin­[email protected] glob­al­times.com.cn

Illustrati­on: Liu RUI/GT

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