Illustrative image (Photo: laodong.vn) In an article on the websiteof S&PGlobal Market Intelligence, Asia Pacific Chief Economist RajivBiswas said Vietnam is expected to continue to be a keybeneficiary of the shift in global manufacturing supply chains towards competitiveSoutheast Asian manufacturing hubs.
He held that Vietnam will continue to benefit from itsrelatively lower manufacturing wage costs relative to coastal Chinese provinces.It has a relatively large, well-educated labour force compared to many otherregional competitors in Southeast Asia, making it an attractive hub formanufacturing production by multinationals. Besides, many multinationalshave been diversifying their manufacturing supply chains during the past decadeto reduce vulnerability to supply disruptions and geopolitical events.
The country is also set to benefit from its growing networkof free trade agreements such as the ASEAN Free Trade Agreement (AFTA),the Comprehensive and Progressive Agreement for Trans-Pacific Partnership(CPTPP), the EU-Vietnam Free Trade Agreement (EVFTA), and the RegionalComprehensive Economic Partnership (RCEP), Biswas added.
TheEconomic Times said Vietnam is among the economies likely to benefit from theglobal supply chain changes, and that it has done relatively well in attracting big names inthe past few years such as Samsung, Apple, Google, Nike, and Adidas.
On Eurasia Review, analyst and journalist MatijaŠerić cited PricewaterhouseCoopers as saying that Vietnam is already a regional (middle) power, and in the futureit could become an even stronger power in Asia and the Indo-Pacific region,maybe even wider. By 2050, Vietnam’s economy could be the 10th largestin the world.
The factory of Matsuo Industries Vietnam in the Thang Long Industrial Park in Hanoi (Photo: laodong.vn) The writing notedthat there are three main factorsthat contributed to the rapid rise of GDP growth, production, and investments. The first factor refers to the almostmaximum liberalisation of trade with Asia and the rest of the world. Anotherfactor is domestic reforms through the deregulation of the economy and thelowering of labor prices. The third important factor is large investmentsthrough public investments in human and material capital.
The InternationalMonetary Fund (IMF) projected Vietnam’s economic growth will recover in thesecond half of 2023, reaching around 4.7% for the year, supported by a rebound in exports and expansionarydomestic policies. Inflation is expected to remain contained belowthe State Bank of Vietnam’s 4.5% ceiling.
Participants inthe 14th Annual Meeting of the New Championsof the World Economic Forum (WEF) in Tianjin, China, in late June heldthat Vietnam is one of the bright spots of economic recovery in the region anda success example in the pandemic combat, and also plays a pioneering role inchanging its growth model and committing to energy transition.
Titled “Vietnam: A rising star in emerging markets”, an article on US-basedwebsiteportfolio-adviser.com said there is frequent hope that Vietnam will be upgradedfrom its current, off-benchmark, frontiermarket status to emerging market status by MSCI. Its stock market overall now meets the size and liquidityrequirements to be included, with a four-fold surge in retail participationduring the past 2 - 3 years, driven by digital account technology.
However,the limiting factor is the strict foreign ownership limits (FOLs) thatconstrict the market depth, it pointed out./.
VNA
