Vietnam likely to be among fastest-growing economies in next decade: East Asia Forum

Vietnam has the potential to become the fourth largest exporter of high-tech goods behind China, Taiwan (China) and Germany. - Illustrative image  (Photo: VNA)

Sydney (VNA) – Vietnam has uniquely positioned itself to be among the fastest-growingeconomies in the coming decade, according to an article published recently on Australia-basedwebsite eastasiaforum.org.

The article said that Vietnam’s successin managing the COVID-19 pandemic as Asia’s top performing economy during thepandemic has strengthened the country’s statism and reputation as a safe andfriendly environment for foreign direct investment.

Amid the pandemic and rising US–China trade tensions, Vietnamleapfrogged the Republic of Korea (RoK) to become the US’s sixth largest tradepartner by import value in 2022, it stressed, adding that thisjump represents an important pivot in Vietnam’s economy - Vietnam’s biggestexport to the US is no longer textiles and garments, but high-techproducts.

By the end of 2023,many flagship Apple products will have been assembled in Vietnam. Rather thancompeting against China’s ‘world factory’ tag, Vietnam has branded itself as anadditional manufacturing destination to China within the global supply chainecosystem, the article said.

Unloading goods at a port. (Photo: VNA)

According to the article, Vietnam has provided a much-needed ‘neutral’environment for foreign fintech firms to de-risk and reroute their exposurefrom the US–China great power rivalry. The Southeast Asian nation is alsowelcoming back China’s Huawei - the leading global provider of information and communications technology infrastructureand smart devices.

Vietnam has the potential to become the fourth largest exporterof high-tech goods behind China, Taiwan (China) and Germany. Though Vietnamcurrently holds seventh position, its growth hasno rival - high-tech goods as a share of Vietnamese exports hit42% in 2020, up from 13% in 2010.

The Vietnamesegovernment’s intervention in opening the country up for free trade and foreigndirect investment can be seen as overwhelmingly positive and non-threatening tothe global trading system, the article said.

“WhileVietnam’s high-tech exports are fuelling the country’s growth, there isan overreliance on foreign innovation inputs, with about 70% of Vietnam’s totalexport value driven and captured by foreign companies”, it noted.

However, there is a significant bright spot - thecurrent FDI inflows from fintech companies are giving Vietnam more time toaddress its dependency on foreign innovation inputs. For instance, theVietnamese government could entice Apple to invest in research and developmentand deepen its relationships with Vietnamese universities and students, asApple did in China.

Vietnam’s race to becomethe next Asian tiger has its challenges, including the question of how toreduce the country’s overreliance on foreign innovation inputs. However, itappears that core elements of an innovation ecosystem are taking root asVietnam establishes itself as a high-tech export power./.         

VNA