Vietnam: Asia’s New Economic Powerhouse – Atul Sachdeva, Senior Journalist

Atul Sachdeva (New Delhi): Vietnam has achieved remarkable growth over the past 10–15 years. It is now being referred to as “Factory of the World 2.0.”

1. What developments have taken place in Vietnam?

A. Infrastructure

• Ports: Cat Lai and Hai Phong ports rank among the world’s top 20; shipping operations are highly efficient.
• Roads & Metro: New metro lines and highways are being constructed in Hanoi and Ho Chi Minh City.
• Electricity: Power outages are minimal; the government has invested $15 billion in solar and wind energy.

B. Technology and Cities

• Ho Chi Minh City and Da Nang have emerged as “startup hubs”; Fintech and E-commerce sectors are booming.
• R&D centers for companies like Samsung and Intel are now opening here.

1. What are the key industries and businesses?
   Industry | Activities | Global Rank
   Electronics | Manufacturing phones, laptops, chips, batteries | #2 in phone exports
   Textiles & Footwear | Apparel for Nike, Zara, Uniqlo | #3 in exports
   Furniture & Wood | Sofas, tables for the US and EU | #2 in exports
   Agriculture | Coffee, rice, cashews, black pepper | #2 in coffee, #1 in cashews
   New Industries | EV batteries, solar panels, semiconductors | Rapidly growing
   Domestic businesses are also booming—VinGroup (automobiles), VNG (gaming & tech), and Viettel (telecom).
2. What are the government’s policies?

Government policy is the real reason behind Vietnam’s success.

1. Doi Moi Reforms (since 1986)
   It is a communist country, yet the economy is fully open, allowing complete freedom for private companies and foreign investment. 2. Red carpet for FDI

• Tax exemptions for foreign companies for up to 4 years
• Land available at low rates for a 50-year lease
• Single-window system: Factory permits granted within 45 days

1. Web of Free Trade Agreements
   CPTPP, EVFTA, RCEP, India-ASEAN FTA—totaling 17 deals. This means goods can be sold tax-free in over 60 countries.
2. “China + 1” Policy
   The government is actively inviting companies from the US, Japan, and Korea to help them reduce their reliance on China.
3. Human Resources
   Technical education in schools; the government is opening engineering colleges. The workforce is disciplined and educated.
4. Key figures for 2026

• GDP Growth: 6.5% – 7% (Top in Asia)
• FDI: $36 billion/year
• Exports: $380 billion
• Poverty: Was 60% in 1990; now less than 5%

In simple terms
Vietnam got three things right:

1. Low-cost labor + discipline
2. Global free trade
3. Government did not hinder business

That is why companies today speak of “China + Vietnam.”

Challenge: Currently, Vietnam mostly handles assembly. It needs to learn “design and chip manufacturing.” It also requires more power infrastructure and ports.