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Bloomberg

A red-hot economy, business-friendly policies and a Communist party led by free-traders: that’s the pitch Vietnamese Prime Minister Nguyen Xuan Phuc is delivering to global investors amid the US-China trade war.
“We are ready to grab the opportunity,” Phuc said in an interview with Bloomberg TV before departing this week to the World Economic Forum in Davos, Switzerland.
Vietnam is quietly positioning itself as a safe haven for manufacturers wary of getting caught in the crossfire of the tariff war between the US and China.
With a raft of free trade agreements, relatively cheap labour and proximity to China, Phuc has a good story to tell global executives he’ll meet in Davos.
“We are trying to increase exports in both quantity and quality of our products, especially in which we have advantages, such as seafood, commodities, footwear and electronics,” Phuc said.
“We aim to become an export economy that can grow fast and provide more jobs with higher income for our people.”


Nonetheless, the Southeast Asian nation is yet to see a flood of companies moving in from China, he said.
And the economy has some serious challenges to overcome: inadequate infrastructure and lack of skilled workers make it difficult to attract manufacturing beyond assembly-line work such as garment stitching.
Global economic conditions are also worsening. The US-China trade war and more subdued world growth is weighing on export demand, a threat to an economy like Vietnam where trade accounts for about twice the nation’s gross domestic product – more than any country in Asia apart from Singapore. About a quarter of Vietnam’s total trade is with China.
US-China trade war divides Southeast Asia, belt and road fears unite it: survey
Vietnam’s economy seems to be sheltered for now. Growth quickened to 7.1 per cent in 2018, among the fastest in the world.
Phuc said he was confident growth would reach the higher end of the government’s forecast range of 6.6 per cent to 6.8 per cent this year. He also vowed to keep the Vietnamese dong stable in 2019.
“We see growth momentum in different areas and have good foundations to achieve our goals,” Phuc said.

Vietnam, which has completed about 16 free trade agreements, began tethering itself to global trade after introducing market-oriented “doi moi” reforms in the 1980s.
Exports surged to a record US$244 billion last year, with US customers accounting for about US$48 billion of that – more than double compared with five years ago.
Several large manufacturers already operate in Vietnam, the biggest of which is Samsung Electronics, which accounted for about a fifth of the country’s exports last year.
Trans-Pacific trade pact members work to entice more economies as bulwark against protectionism
Phuc, concerned about anti-trade sentiments from the Trump administration, is vowing the country will step up imports from the US, from Boeing aircraft to products from oil companies.
“The challenges this year will include global trade tensions, climate change and insufficient infrastructure,” he said.
As a developing economy, he added, “we have to keep growing to bring more jobs to our people and eliminate poverty. We have to grow at more than 6 per cent annually to boost per capita income and to escape the middle income trap.”
Still, Phuc has a good story to sell to global investors. Vietnam was ranked No. 1 among seven emerging Asian countries as manufacturing destinations by Natixis SA, which looked at demographics, wages and electricity costs, rankings in doing business and logistics, and manufacturing as a share of total foreign direct investment.
“The government has been doing a lot to help foreign investors to grow businesses long- term in Vietnam,” Phuc said.


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US-China trade war

US-China trade war: Vietnam makes pitch to businesses caught in the crossfire

Vietnam’s Prime Minister Nguyen Xuan Phuc has a good story to tell global executives he’ll meet in Davos this week. Photo: Bloomberg

Vietnam's Prime Minister Nguyen Xuan Phuc (L) toasts with US President Donald Trump during a special gala celebration dinner for the Association of Southeast Asian Nations (ASEAN) in Manila on November 12, 2017. - World leaders arrive in the Philippines' capital for two days of summits beginning on November 13. (Photo by ATHIT PERAWONGMETHA / POOL / AFP)

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Vietnam’s Prime Minister Nguyen Xuan Phuc has a good story to tell global executives he’ll meet in Davos this week


With a raft of free trade agreements, relatively cheap labour and proximity to China, Vietnamese Prime Minister Nguyen Xuan Phuc has a good story to tell global executives he’ll meet in Davos this week.
