{"id":31325,"date":"2025-06-19T17:09:53","date_gmt":"2025-06-19T17:09:53","guid":{"rendered":"https:\/\/financialrush.com\/?p=31325"},"modified":"2025-06-19T17:09:53","modified_gmt":"2025-06-19T17:09:53","slug":"why-vietnam-should-revamp-its-economic-model","status":"publish","type":"post","link":"https:\/\/financialrush.com\/?p=31325","title":{"rendered":"Why Vietnam should revamp its economic model"},"content":{"rendered":"<p> \n<\/p>\n<div>\n<p>Unlock the Editor\u2019s Digest for free<\/p>\n<p class=\"article__content-sign-up-topic-description o3-type-body-base\"><span>Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/span><\/p>\n<p><iframe class=\"article__content-sign-up-iframe close\" scrolling=\"no\" id=\"signUpIframe\" data-prev-url=\"\/register\/in-article-sign-up?ft-content-uuid=f50e4da0-ae4d-4ee8-b5bc-8059ba3113cd\"><\/iframe><\/div>\n<div id=\"article-body\">\n<p>Will Eric Trump\u2019s real estate plans save Vietnam\u2019s export-driven economy? With President Donald Trump threatening to impose 46 per cent tariffs on its goods from July 9, the country \u2014 which sends nearly 30 per cent of its exports to the US \u2014 could use some goodwill from America\u2019s first family. Hanoi has rushed to clear the way for a $1.5bn Trump Organization golf resort. Eric Trump and Vietnam\u2019s prime minister broke ground on the project in late May, just seven months after it was announced. The US president\u2019s son has also been <a href=\"https:\/\/www.ft.com\/content\/6946804d-d086-4c79-a4ee-9c2fc3e6b864\" data-trackable=\"link\">discussing a Vietnamese Trump Tower<\/a>.<\/p>\n<p>Vietnam\u2019s hopes for a tariff reprieve do not rest only on real estate. It has offered to remove its own tariffs on US goods, clear non-tariff barriers and buy Boeing planes and US gas. American companies that have made Vietnam central to their \u201cChina plus one\u201d diversification strategy, and which account for much of the south-east Asian country\u2019s $125bn trade surplus with the US, have also been lobbying. President Trump should listen, not least because unnecessarily alienating a nation that is a potential pillar of resistance to Chinese regional domination looks like geopolitical madness. <\/p>\n<p>Yet even if Trump softens his tariff threat, it is clear that Vietnam has to <a href=\"https:\/\/www.ft.com\/content\/81caf263-7e5a-43bb-9ee4-1de1a89bc394\" data-trackable=\"link\">change its economic mode<\/a>l. Surging foreign investment in its manufacturing sector has driven rapid growth in recent years, but with the ratio of exports to GDP standing at nearly 90 per cent in 2023, diversification and development of its domestic market is badly needed. Export-related employment grew rapidly between 1995 and 2019, but Vietnam saw \u201czero net job creation from domestic demand\u201d, the World Bank said last year in a <a href=\"https:\/\/documents1.worldbank.org\/curated\/en\/099111424204523679\/pdf\/P1787841e077190d919b24181b4dcb14765.pdf\" data-trackable=\"link\">report<\/a> that warned reform implementation had \u201cstalled in recent years\u201d. Exports are still dominated by low-value-added factories reliant on inputs from China. Only 5 per cent of manufacturing workers are high-skilled.<\/p>\n<p>To Lam, Vietnam\u2019s Communist party chief, is shaking things up. Lam is merging provinces, scrapping ministries and cutting bureaucratic jobs. Last month he unveiled plans to revamp the legal system, increase international engagement and provide more support for domestic technology and innovation to help <a href=\"https:\/\/www.ft.com\/stream\/ba15fdc1-6edd-3dc1-83d7-04a04991e0c8\" data-trackable=\"link\">Vietnam<\/a> meet its goal of becoming a high-income nation by 2045. But the most important decision by the party\u2019s governing Politburo, Resolution 68, was to officially recognise the private sector as the <a href=\"https:\/\/www.ft.com\/asia-pacific-economy\" data-trackable=\"link\">economy\u2019s<\/a> key driving force. Lam wants to foster 20 large private companies integrated into global value chains by 2030 and boost the number of private enterprises to at least 3mn by 2045, from under 1mn now.<\/p>\n<p>There is much here to applaud. Bureaucratic streamlining, fairer and more open law enforcement, and support for the private sector will promote homegrown entrepreneurialism. But Lam makes clear it would still be \u201ca socialist-oriented market economy, managed by the state, under the leadership of the party\u201d. The focus on a cohort of private national conglomerates risks misdirecting capital and creating opportunities for corruption. Nor is Lam diluting the party\u2019s power or easing its tight censorship and media controls, even though more diverse oversight could help his reforms succeed.<\/p>\n<p>Still, the push for change is encouraging. As one of the world\u2019s most rapidly ageing countries, Vietnam\u2019s clock is ticking. In a speech last month, Lam referenced an old proverb on the price to be paid for arriving late at a watering hole. Vietnam, he said, currently had a golden opportunity for development, but without urgent reform would risk falling behind in the global race and being left \u201clike a slow buffalo drinking muddy water\u201d.<\/p>\n<\/div>\n\n<br \/><a href=\"https:\/\/www.ft.com\/content\/f50e4da0-ae4d-4ee8-b5bc-8059ba3113cd\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this&hellip;\n","protected":false},"author":5,"featured_media":31326,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[],"class_list":["post-31325","post","type-post","status-publish","format-standard","has-post-thumbnail","category-us","cs-entry","cs-video-wrap"],"_links":{"self":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts\/31325","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=31325"}],"version-history":[{"count":0,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts\/31325\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/media\/31326"}],"wp:attachment":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=31325"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=31325"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=31325"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}