{"id":10381,"date":"2022-05-29T17:03:55","date_gmt":"2022-05-29T15:03:55","guid":{"rendered":"http:\/\/east-sea.de\/?p=10381"},"modified":"2022-05-29T17:03:55","modified_gmt":"2022-05-29T15:03:55","slug":"english-how-vietnams-economy-benefits-from-chinas-pandemic-policy","status":"publish","type":"post","link":"https:\/\/east-sea.de\/en\/2022\/05\/29\/english-how-vietnams-economy-benefits-from-chinas-pandemic-policy\/","title":{"rendered":"How Vietnam’s economy benefits from China’s pandemic policy"},"content":{"rendered":"Unlike China, Vietnam has largely overcome the pandemic and wants to continue building on its economic success story from recent years. Can Hanoi sustain long-term growth?<\/em><\/p>\n

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Vietnam’s adherence to an open economy makes it ‘indispensable from a European perspective’<\/em><\/p>\n

Vietnam was one of the few countries whose\u00a0economy grew<\/a>\u00a0during the coronavirus pandemic in 2020. Many say this was due to early and\u00a0rigorous action<\/a>\u00a0by the government and a zero-COVID strategy that kept case numbers low for a long time.<\/p>\n

However, in summer 2021, before the omicron variant changed how countries approached pandemic policy, the\u00a0delta variant’s spread in Vietnam began to\u00a0spiral out of control<\/a>.<\/p>\n

As infection rates climbed, factories from international companies like Samsung, Apple, Nike and Zara were\u00a0forced to close<\/a>\u00a0for weeks.<\/p>\n

Workers returned to their home villages in chaotic conditions. According to the World Bank, Vietnam’s annual economic growth fell to 2.58%.<\/p>\n

Vietnam decided to change its strategy\u00a0and pushed ahead with a vaccination campaign, which had previously been neglected. Hanoi took a pragmatic approach and, unlike China, also used Western vaccines.<\/p>\n

“Vietnam got its act together relatively quickly, and that shows the adaptive capacity of the Vietnamese system,” Daniel M\u00fcller, manager at the German Asia-Pacific Business Association, told DW.<\/p>\n

Meanwhile, almost all coronavirus restrictions have been lifted in Vietnam.<\/p>\n

The risk of further lockdowns is low, said Dang Duc Anh, director of Vietnam’s National Institute of Hygiene and Epidemiology, according to Reuters news agency. The Asian Development Bank forecasts Vietnam’s economy to grow 6.5% in 2022 and 6.7% in 2023.<\/p>\n

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Production moving\u00a0to Vietnam from China<\/h2>\n

There are signs Vietnam’s economy is benefiting from its altered pandemic policy.<\/p>\n

Many companies, especially in the electronics industry, are putting up a lot of money. South Korean electronics giant Samsung announced in February it would invest a further $920 million (\u20ac857 million) in Vietnam.<\/p>\n

There is also a continuing trend of moving high-tech production from China to Vietnam.<\/p>\n

Chinese electronics groups such as Luxshare Precision Industry, Goertek, and Taiwanese iPhone assembler Pegatron, are moving facilities to Vietnam, according to the German electronics trade magazine\u00a0Elektronik Praxis<\/em>.<\/p>\n

“Vietnam will be one of the main beneficiaries of shifting supply chains,” Raphael Mok from the consultancy Fitch Solutions told Reuters.<\/p>\n

M\u00fcller from the German Asia-Pacific Business Association said that Vietnam has “always been in the spotlight” of German companies.<\/p>\n

“The real run hasn’t started yet, but that could change now because business dissatisfaction in China has now reached a level that didn’t exist before,” M\u00fcller said.<\/p>\n

China is drawing increasing criticism with its\u00a0zero-COVID policy<\/a>\u00a0and weeks-long lockdowns that can be set off by a relatively low number of infections.<\/p>\n

The ongoing\u00a0lockdown<\/a>in the business and production metropolis of Shanghai has\u00a0created global supply chain problems<\/a>\u00a0as factories and ports sit still.<\/p>\n

Vietnam’s challenges to growth<\/h2>\n

Despite good prospects, there are also challenges for Vietnam’s economy. First, there is Vietnam’s\u00a0deep integration into global supply chains<\/a>, which is both a blessing and a curse.<\/p>\n

Vietnam’s open economic policy of recent years integrating into global supply chains has made the growth success story possible in the first place.<\/p>\n

However, the downside is that Vietnam is dependent on supplies of raw materials and component products, some of which are missing or delayed due to the pandemic.<\/p>\n

Vietnam is also vulnerable to the increasing geopolitical tensions between the US and China.<\/p>\n

Resilient supply chains are therefore key for Vietnam’s continued\u00a0economic strength. However, the country is not yet well enough positioned in this area, according to M\u00fcller.<\/p>\n

Digital supply chains, for example, are not yet sufficiently in focus in Vietnam, he said. Digital supply chains comprise the digital networking of all processes and steps in a supply chain to monitor them in real time\u00a0and make them even more efficient.<\/p>\n

But it is not only supply chains that need to become more resilient, but also Vietnam’s economy as a whole. Essential to this is a broader basis of value-added production, according to M\u00fcller.<\/p>\n

“This requires further professionalization at all levels,” he said, adding that Vietnam’s education and training system, for example, needs to improve. “At the moment, it can barely keep up with the growing demand,” he said.<\/p>\n

Resilience also means strengthening domestic consumer demand. When the\u00a0wave of coronavirus infections struck in the late summer of 2021, Vietnam’s economy, which is dependent on foreign trade, was hit hard.<\/p>\n

According to the World Bank, Vietnam’s foreign trade ratio was 209% in 2020, which indicates a high\u00a0level of economic dependence. With\u00a0its population of just under 100 million, Vietnam cannot aim for economic development centered on domestic demand like China.<\/p>\n

“Initially, it can only be a matter of balancing this out to a certain extent,” said M\u00fcller.<\/p>\n

Vietnam has recognized the problem, but it is struggling to take the necessary steps toward\u00a0bolstering its consumer economy.\u00a0 Increased domestic demand would require larger segments of the population to benefit from economic growth. However, inequality is growing, as is the urban-rural divide, according to a March 2021 study in the trade journal\u00a0Economies<\/em>.<\/p>\n

For more at www.dw.com<\/p>\n

Author: Dr. Rodion Ebbighausen<\/p>\n<\/div>\n

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Aufrufe: 919<\/p>","protected":false},"excerpt":{"rendered":"

Unlike China, Vietnam has largely overcome the pandemic and wants to continue building on its economic success story from recent years. Can Hanoi sustain long-term growth? Vietnam’s adherence to an open economy makes it ‘indispensable from a European perspective’ Vietnam was one of the few countries whose\u00a0economy grew\u00a0during the coronavirus pandemic in 2020. Many say …<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1,37],"tags":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/east-sea.de\/en\/wp-json\/wp\/v2\/posts\/10381"}],"collection":[{"href":"https:\/\/east-sea.de\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/east-sea.de\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/east-sea.de\/en\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/east-sea.de\/en\/wp-json\/wp\/v2\/comments?post=10381"}],"version-history":[{"count":1,"href":"https:\/\/east-sea.de\/en\/wp-json\/wp\/v2\/posts\/10381\/revisions"}],"predecessor-version":[{"id":10384,"href":"https:\/\/east-sea.de\/en\/wp-json\/wp\/v2\/posts\/10381\/revisions\/10384"}],"wp:attachment":[{"href":"https:\/\/east-sea.de\/en\/wp-json\/wp\/v2\/media?parent=10381"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/east-sea.de\/en\/wp-json\/wp\/v2\/categories?post=10381"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/east-sea.de\/en\/wp-json\/wp\/v2\/tags?post=10381"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}