Friday, August 12, 2022

Vietnam Plans to Accelerate Growth and Boost High-Tech Industries | Business and economic news

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The Communist Party says it wants to increase growth by 6.5-7% per year, focus on the quality, not the quantity, of foreign investment.

Having circumvented the worst of the coronavirus pandemic so far, Vietnam aims to revive its economy over the next five years, trusting its mix of free trade deals, privatization and strict COVID restrictions. -19.

Armed with a series of regional peer-envied free trade deals and increasingly drawing factories away from China, the ruling Communist Party formally endorsed ambitions on Monday to push growth beyond 6 % per year in the pre-pandemic era to 6.5-7.0% for the Period 2021-2025.

In an economic development plan confirmed at its five-year convention, it said it would strengthen its growing role as a key manufacturing hub for global giants such as Samsung Electronics Co and Intel Corp. At the same time, the Party is trying to strengthen the country’s profile beyond being a low-cost labor destination for a science and technology center.

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 benefits of China and the United States, its largest trading partners, locked in a bitter trade war that has seen Western manufacturers seek to increasingly move production out of China – with Vietnam emerging as a popular choice.

Speaking after the congress, party secretary general Nguyen Phu Trong – reelected on Sunday for a rare third term as party leader – said Vietnam will aim to be a fully developed country by 2045 and that the crackdown continued corruption in the party ranks would continue. .

High tech investment

The lofty 2021-2025 goals come as Vietnam recedes from its worst COVID-19 outbreak in nearly two months, a reminder that future success will depend at least on the virus being brought under control in the short term.

Annual growth rate of Vietnam’s gross domestic product in percentage [Bloomberg]

Last year’s economic growth rate of 2.9% would have been welcomed in many countries around the world, but it was the worst year in decades for the Vietnamese economy as it suffered the effects of strict quarantines, border closures and other antivirus restrictions.

Despite the pandemic, in January a unit of Taiwan’s Foxconn Technology Co Ltd, a key supplier to Apple Inc., was granted a license to invest $ 270 million in Vietnam as it carried a set of iPads and MacBooks. from China. Meanwhile, US-based chipmaker Intel said it had increased its investment in Vietnam from $ 475 million to $ 1.5 billion.

The country “will focus on measures aimed at fundamentally complementing the elements of a socialist-oriented market economy, better managing the relationship between state and market and society,” according to the Party’s economic plan.

Analysts say it’s a code for Vietnam, which continues its campaign to privatize state-owned enterprises, except those operating in areas deemed essential for national security and defense.

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

After decades of development fueled by robust FDI, mainly in labor-intensive and environmentally unfriendly companies, Vietnam “will not allow projects with obsolete technologies and pollution risks. of the environment, ”he said.


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