Vietnam has tools to achieve even greater economic heights

As the vice chairman of the Italian Chamber of Commerce in Vietnam and a lawyer member of the Milan Bar, with my own firm having offices in Vietnam, Malta, and Singapore, I have had the privilege of witnessing this transformation firsthand since 2007.

Federico Vasoli, managing partner, dMTV Global

Vietnam’s economic growth has been impressive, driven by robust manufacturing, trade expansion, and strategic policy reforms. The government’s proactive measures, including a $20 billion stimulus package and fast-tracked structural reforms, have bolstered economic stability and positioned Vietnam as a strategic trading partner amidst rising global protectionism.

However, recent developments have introduced new challenges. The United States has proposed tariffs on Vietnamese exports, which could significantly impact export competitiveness and deter foreign direct investment. These tariffs present an opportunity for Vietnam to reassess its growth model, transitioning towards higher-value industries and more equitable economic practices. This shift would enhance Vietnam’s competitiveness and make it a more attractive market for Western businesses.

Vietnam has demonstrated swift action in response to these challenges. Diplomatic efforts are underway to negotiate bilateral agreements and ease trade tensions.

Domestically, Vietnam is accelerating public investment and deploying a preferential credit package to support infrastructure, technology, and domestic consumption. These measures are designed to mitigate the impact of tariffs and maintain economic momentum.

Furthermore, Vietnam is on the cusp of regulating virtual assets, with the government developing legal frameworks for digital assets. This move reflects a growing focus on fintech and blockchain integration, positioning Vietnam to pull in substantial investment in the digital sector. As a law firm with expertise in this area, we have seen how clear regulations can draw in significant business by mitigating risks and fostering innovation.

This approach allows for the testing of new financial products and services under controlled conditions, providing an environment conducive to innovation and experimentation, and this is particularly true with the planned opening of an international financial centre in Ho Chi Minh City.

To sustain its economic momentum, Vietnam must address key areas, namely simplification of legislation and procedures and cutting red tape, and investment in education. It should invest heavily in education to develop a more and more skilled workforce open to the global economy. To address all these challenges, Vietnam needs to streamline its regulatory framework and offer legal certainty that make investments more appealing.

The EU, with its rich educational resources and legal frameworks, is well-positioned to welcome Vietnamese students and talents and provide benchmarks. This can help bridge cultural and economic gaps, fostering a more globalised and competitive talent pool.

The recent visit of the Chinese president highlighted Vietnam’s strategic position in regional diplomacy, and aimed to strengthen ties with Vietnam, particularly in trade and supply chains, amid escalating US-China trade tensions.

The two nations have finalised several agreements across various sectors, including rail infrastructure and digital economy advancements. This visit demonstrates Vietnam’s delicate balancing act between major economic powers, as it seeks to maintain strong relations with both China and the US.

With its strategic location, improved business environment, and emerging digital asset market, Vietnam remains an attractive destination for investors and businesses alike. In the coming years, Vietnam’s ability to adapt and innovate will be crucial.

The country’s strong foreign investment inflows, particularly in manufacturing and high-tech sectors, are positive indicators of its resilience. Infrastructure development and digital transformation are also expected to play pivotal roles in sustaining growth.

By addressing regulatory complexities, investing in education, and leveraging digital assets, Vietnam can achieve even greater economic heights.

As Vietnam celebrates the reunification anniversary, it is poised to continue its remarkable economic journey, and the country’s proactive response to trade challenges positions Vietnam well for future growth.