Vietnam targets growth acceleration, shift to hi-tech gear in Communist Party economic blueprint By Reuters


© Reuters. The 13th national congress of the ruling communist party of Vietnam in Hanoi


By Khanh Vu

HANOI (Reuters) – Having sidestepped the worst of the coronavirus pandemic so far, Vietnam aims to rev up its economy over the next five years, trusting on its custom-tooled mix of free trade deals, privatisation and tight COVID-19 curbs.

Armed with a raft of free trade deals envied by regional peers and increasingly luring factories away from China, the ruling Communist Party on Monday formally approved ambitions to raise growth beyond an annual 6% in the pre-pandemic era to 6.5%-7.0% for the 2021-2025 period.

In an economic development blueprint confirmed at its five-yearly congress, it said it would boost its growing role as a key manufacturing hub for global giants like Samsung Electronics (OTC:) Co and Intel Corp (NASDAQ:). At the same time, the Party is targeting raising the country’s profile beyond a low-cost labour destination to a centre for science and technology.

With more than a dozen free trade agreements now under its belt, Vietnam aims to expand and diversify export markets, the Party said.

The country has reaped the benefit of China and the United States, its largest trading partners, being locked in a bitter trade war that has seen Western manufacturers look to move more and more of their production out of China – with Vietnam a popular choice.

The lofty 2021-2025 targets come as Vietnam recoils from its worst outbreak of COVID-19 in nearly two months, a reminder that future success will depend in the short term at least on keeping the virus at bay.

Last year’s 2.9% growth would have been welcome in many countries around the world, but was the worst year in decades for Vietnam’s economy as it soaked up the impact of tight quarantines, border closures and other anti-virus curbs.

Despite the pandemic, in January, a unit of Taiwan’s Foxconn Technology Co Ltd, a key Apple Inc (NASDAQ:) supplied, obtained a licence to invest $270 million in the country as it is moving some iPad and MacBook assembly from China. Meanwhile U.S. chipmaker Intel said it raised its investment in Vietnam by $475 million to $1.5 billion.

The country will “focus on measures to basically complete the elements of a socialist-oriented market economy, better handling the relationship between the state and the market and society,” according to the Party’s economic blueprint.

Analysts say that’s code for Vietnam continuing its drive to privatise state-owned enterprises, except for those operating in areas deemed essential for national security and defence.

The Party also said it will shift its focus on foreign direct investment (FDI) from quantity to quality, with a focus on environmental risks.

After decades of development driven by robust FDI, largely in labour-intensive and environmentally unfriendly business, Vietnam “won’t allow projects with outdated technologies, environment pollution risks,” it said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

One thought on “Vietnam targets growth acceleration, shift to hi-tech gear in Communist Party economic blueprint By Reuters

Comments are closed.