Although Vietnam has enjoyed great fame on the international financial page in the past few years, things like "Asian economic rising star" and "the next world factory" have appeared one after another, it seems that the global industrial chain is about to rewrite the script for it.
But just three years later, the "black horse" suddenly seemed to be smoked, the economic growth slowed, the currency collapsed, the roof collapsed, investors withdrew to the tide, and the whole country seemed to be pressed on the suspension key.
The "Vietnam miracle" that was once blown to the sky by capital is now undergoing a comprehensive reality test. Anyone who does not wear his pants will be immediately exposed.
A shiny data skin cannot contain the "puffy physique" in your bones
Judging from the data, Vietnam's take-off seems impeccable. In 2021, the export volume will exceed 336 billion US dollars, and the GDP growth rate was once comparable to the early stage of China's economic take-off. Coupled with the so-called "Sino-US decoupling dividend", it seems that the whole world is betting on Vietnam. Behind all this is actually an OEM economic game with "foreign capital water injection" as the core.
Vietnam's exports look fierce, but there is also a lot of water in them. The so-called "processing foreign trade" model means, to put it bluntly, imports raw materials, assembles them locally, labels them, and then sells them intact.
The processing fee that the middle earned, even a decent profit chain is not counted, from mobile phones to clothes, from electronic components to furniture, Vietnam is only a "transfer station", the profit should belong to whom, Vietnamese enterprises are basically transformed into "generic factories" shipping workers.
Looking at the industrial structure, Vietnamese domestic enterprises can not get into the core link of high added value, research and development rely on foreign enterprises, brands rely on foreign, even the dominance of the supply chain is not in their own hands, this is like a house that looks high, but the ground is hit with sand, once foreign investment is drawn, the whole building stands unstable.
However, the "loyalty" of foreign investment has never been high. To put it bluntly, it is an old saying that capital is profit-seeking. Although Samsung and Foxconn lined up to enter Hanoi and Ho Chi Minh, today Mexico and India beckon, they will pack up and leave tomorrow.
Not to mention the U.S. interest rate hike, the tightening of global liquidity, many funds directly withdraw, the Vietnam Shield response fell, the currency devaluation pressure chain reaction, can it be sustained, we have to see if there is a "hard power."
The problem is that Vietnam's "internal work" is really not okay, local private enterprises are basically "small workshops", financing is difficult, technology is weak, scale is small, even bank loans can not get a few, and what innovation?
Approval stuck, policy fights, and local protectionism are rampant. Whether it is foreign capital or local bosses, they all work like playing a maze game.
Infrastructure does not argue, you say you want to engage in large manufacturing, but the port is blocked every day, the power system has a typhoon to limit electricity, logistics costs are higher than the surrounding countries, who is willing to stay for a long time? human resources also encounter a bottleneck, although labor is cheap, but can dry complex processes, can automated production line technical workers serious shortage.
Professional education cannot follow, a lot of university graduates, but really can "work" a few.
This is the truth of Vietnam's economy. It looks lively, but it is actually puffy. It earns "hard money" and fights for "demographic dividend", but it lacks "technical dividend" and "institutional dividend". Once the external environment changes, the so-called "myth" may become a "joke".
The wind turns, the economy slows, and systemic risks are approaching.
Over the past three years, the global economic environment has changed, Vietnam's trouble has also emerged one by one, like the dominoes, a series of events, the return of capital brought by the U.S. Federal Reserve interest rate hike, is the first wave of shock, Vietnam's currency against the dollar exchange rate from 2022 starts to decline, to September 2025 has fallen more than 15%, foreign funding withdrawal, debt cost spike, enterprise pressure is big to the air.
Especially in the real estate and infrastructure sectors, in the past few years, foreign investment and debt have been used to build high-rise buildings and industrial parks. As a result, financing is now broken, projects are in ruins, homebuyers 'rights protection, bank non-performing loans have soared, and one chain has gone wrong, and the entire financial system has begun to tighten.
The bursting of the real estate bubble not only brought about the downturn of the property market, but also the credit crisis of the banking system and the complete stall of consumer confidence.
What worries Vietnam the most is that its "alternative to China's industrial chain" has begun to look less beautiful. Many multinational companies have found that although Vietnam is cheap, it has incomplete supporting facilities, a small market, and unstable logistics. Once the business becomes complex, it will be unable to do so.
In contrast, India's market potential, Mexico's geographical advantages, and even Indonesia's resource base are beginning to become more attractive than Vietnam.
Thus, the one that was once blasted by its divine "China + 1" strategy, now turned into a "China + other + viewing situation", Vietnam's "single" position is loosing, it is being marginalized by the "multipolarized" industry transfer trend.
More importantly, its own consumer market is too small to support a complete industrial system by domestic demand. As soon as external demand decreases, domestic demand cannot support it. The economy is like a machine short of oil, and it is becoming more and more difficult to run.
Social resilience is not strong, inflation comes, the cost of living rises, the average people eat and consume, consumer confidence decreases, Vietnam's social security system is weak, once unemployment, income decreases, the family's resistance to risk is almost zero, this is a deadly blow to the entire domestic demand market, there is no "middle class" support field, what is the economic smooth transition?
From the escape of foreign capital to the collapse of the property market, from financial tension to weak consumption, this series of problems is not only a "slowdown of economic growth", but a comprehensive systemic failure of a country's "development model". Vietnam's economic train has not only slowed down, but is about to derail.
Exporting into difficulty, transformation is the way out, but this is not good.
Speaking logically, everyone knows that relying on "work" is not far, Vietnam, of course, also understands this reason, the problem is, knowing to know, really need to transform, difficulty compared to "fertility replacement."
First of all, the industrial upgrading of the "inherent capacity" is not enough, want to do high-end manufacturing, you have to have a somewhat decent indigenous industrial base? but Vietnam has not yet been able to create a few handy industrial clusters, indigenous enterprises have no technology, no brands, no financing, dependent on foreign investment, can not build a complete ecosystem.
The Vietnam government has also shouted slogans to develop semiconductors, digital economy, and new energy. However, the reality is that the policy level is "very hot at the top" and grassroots implementation is "as cold as a refrigerator." The approval process is slow, the legal environment is opaque, and local governments are independent. Enterprises cannot continue working if they work.
The education system is also far from keeping up with demand. Innovation depends on talents. However, education in Vietnam is more about "test-oriented delivery" rather than industry-oriented skills training.
There is a shortage of engineers and it is difficult to find high-skilled technicians. Even foreign companies complain that "it's not that they don't want to stay, but they can't find people who can use them." If the talent bottleneck is not solved, no matter how many high-end industrial plans are, they can only "make a big cake."
The introduction of foreign capital has to be "picked". In the past, Vietnam was "whatever comes", but now it has to turn to "choosing high quality and integrating" to attract those enterprises that can bring technology, management and take root in the local area, instead of "earning a vote and leaving" short-term capital, but this requires a transparent legal system, intellectual property protection and a stable business environment. These conditions are still far behind in Vietnam.
From the Chinese perspective, the trouble in Vietnam is also an opportunity for cooperation, and the complementarity between China and Vietnam is strong within the framework of RCEP and the regional industrial chain layout.
China's capabilities in the fields of infrastructure, digital technology, and green energy can help Vietnam improve its own industrial chain and improve the level of local manufacturing. Vietnam can also become a "fulcrum country" for China's industrial spillover, but the premise is that it must stabilize itself first and not "drop off" whenever there is any trouble.
In order for Vietnam to upgrade from a “workplace station” to an “innovation hub”, it needs not a few more foreign-invested projects, but a comprehensive restructuring of the whole system, policy, talent, and capital.
This is not something that can be solved in years, it is a long-term hard battle, once it goes badly, today's "disappearance" may be just a prelude, and tomorrow's "crash" is the real risk.
In the final analysis, the economic story of Vietnam is a realistic teaching material about growth and cost. The former enthusiasm may not be a certification of strength, and today's dilemma may not be the end of destiny. However, whether it can get out of this "phantom fragmentation" period of pain does not depend on how others evaluate it, but only how it chooses itself.
It may be the first country in Asia to fall behind on the transition track. Unless it dares to face its shortcomings and make changes from the root cause, if the wind blows past, not even a shadow will be left.
The reference information:
The "China +1" strategy behind the economic myth of Vietnam 2022-06-13 07:30 China News Weekly