Vietnam-A bright star in Asia

The Vietnamese observe the 2nd of September every year as the National Day that Great President Ho Chi Minh read the Declaration of Independence of Vietnam at Ba Dinh Square in Hanoi, in a ceremony that formally gave the birth to the Democratic Republic of Vietnam and now is the Socialist Republic of Vietnam. This year, Vietnam also marks 75th anniversary of August Revolution that was a significant event in its national history, which broke the chains of French colonialists and Japanese fascists, and overthrew the absolute monarchy which had existed for a thousand years. Continuing the success of the August Revolution, the Vietnamese people then recorded significant victories in the resistance wars against the French and Americas as well as in the Doi Moi economic reform.

Today, Vietnam is in pursuit of the foreign policy of independence, self-reliance, openess, diversification and multilateralization of external relations and active international integration. The diplomacy has become an important front in time of peace and made important contribution to maintaining and securing the peaceful environment and creating a favorable international environment conducive to national construction and defence, thus enhancing the position and prestige of the country in the international arena. Vietnam also implements the policy of “three nos”: No formal military alliances, no hosting of foreign military bases and no explicit alignment with any single outside actor. To continues to raise the banner of peace, cooperation and development, Vietnam is a friend, a reliable partner of all countries and an active and constructive member in the international community, striving for peace, cooperation and sustainable development, actively participating in regional and international cooperation.
To date, Vietnam has established a network of 30 strategic partners and comprehensive partners. The country effectively implemented the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTTP). The first new generation FTA in the world has helped Vietnam’s export turnover to members such as Japan, Canada and Mexico increase significantly compared to 2018. In 2019, Vietnam signed the Vietnam-European Union Free Trade Agreement (EVFTA) with the European Union and the Investment Protection Agreement (EVIPA) and completed negotiations of Regional Comprehensive Economic Partnersip Agreement (RCEP). By June 8, 2020, Vietnam’ National Assembly approved the EVFTA and EVIPA. The EVFTA, officially signed last June after six years of negotiations, has been dubbed “the most ambitious” FTA the EU has ever reached with a developing country, accodrding to the European Commission. The EU is one of Vietnam’largest trade partners with turnover of US$56.45 billion in 2019, of which Vietnam exported goods worth US$41.54 billion and imported goods worth US$14.9 billion.
Vietnam’economy shows positive signs
Vietnam has garnered international praise for its swift and effective response to the COVID-19 outbreak. Although the country is not immune to the global economic downturn, its prospects for recovery remain positive and are brightest among Asian countries.
In July, data released by Vietnam’s General Statistics Office (GSO) estimated a 1.81 percent growth to Vietnam’s GDP in the first half of 2020. This figure appears to be low compared with the 6.76 percent economic growth rate in the first half of 2019, but it is a very positive growth rate during the pandemic. Some economic analysts estimated that the economic growth this year will slow down to 3 to 4 percent compared to 7.02 percent last year. IMF has cut its economic growth projections for the Vietnamese economy to 2.7 percent this year and the World Bank estimates a growth of 4.9 percent, but Vietnam’ government sets the target of more than 5 percent. This growth rates are impressive when we look at the economic picture of Asian economies. Political leaders in Vietnam in May asked the government to use all domestic resources to maintain  the pace of economic growth amid the pandemic. If it achieves this goal, Vietnam will be able to defend its status as Southeast Asia’ fastest-growing economy, just as the country becomes the first in the region to emerge from the COVID-19.
Although disruptions to global supply chains caused by COVID-19 are weighing on Vietnam’exports, the country stands to benefit from companies looking to diversify their manufacturing base away from China. Vietnam’s strong economic fundamentals should enable the country to rebound in 2021 if the pandemic is relatively under control in the nation and globally, according to the World Bank. Vietnam was already well positioned to capture more the global supply chain as companies accelerate shifts away from China due to rising costs and the trade war. Global giants such as SamSung Electronics Co., LA Electronics Inc. and Intel Corp. have already set up large operations in the country, according to Bloomberg.
The pandemic is posing a big threat to all the developing economies in the world in general, especially in terms of attracting the foreign direct investment (FDI). Vietnam is not exceptional, as of June 2020, the country disbursed US$8.65 billion of foreign investment projects, which is equivalent to 95.1% over the same period last year. However, FDI attraction saw a 3.1 percent increase from the last year. The total FDI into Vietnam between the beginning of this year and June reached US$15.67 billion, equivalent to 84.9% of the figure for the same period of last year, according to Vietnam’s Ministry of Planning and Investment. There were 1,418 newly licenced projects during Jan-June, with registered capital of US$8.44 billion. FDI has been a key driver of Vietnam’economic growth. Companies with FDI account for around 70% of the Southeast Asian country’s export. Among the 98 countries and territories registering new projects in Vietnam in the first six months, Singapore was the largest investor, with US$5.44 billion, accounting for 34.7% of the total, followed by Thailand with US$1.58 billion (10.1%), and  then China, Japan, the Republic of Korea.
Vietnam had trade surplus of US$4 billion in the first half of 2020. As of the first six months of this year, the total import and export turnover of goods reached US$238.4 billion, in which the export value is estimated at US$121.21 billion. Within the first six months, there were 22 commodities with the export turnover of over US$1 billion, accounting for 86.2% of the total export turnover.

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