Economics overview
Vietnam is experiencing a period of “golden population structure” with 56 million people of working age, accounting for 58% of the total population. Over the next 15 years, Vietnam will still benefit from this demographic trend and will therefore be a destination for investment flows around the world. The young population also opens up investment opportunities in the fields of production and services for young consumers.
The private sector, which is expected to be the driving force for Vietnam's economic growth in the coming time, has increasingly taken up a large proportion in Vietnam's economic structure. The ineffective state economic sector is being narrowed and strongly restructured through the process of equitization and divestment of state capital.
Within 8 years, the number of middle-class Vietnamese has nearly tripled. The average salary of employees in listed companies has increased from VND 13.5 million to VND 22 million. The middle class will be the foundation and motivation for the economy in 15 years’ time.
Regarding some economic indicators in 2020, GDP growth will be at 6.8%, inflation will be at 3.7%, public debt will be at 54.3% of GDP, goods export will increase by 7% compared to the same period last year, and import of goods will increase by 7.5%.
Similarities with China
Many figures have shown that Vietnam's economy seems to be similar to China's 10 years ago in terms of the proportion of the middle class, income per capita and the rate of urbanization. Vietnam will reach the level of per capita income equivalent to China in the next 12 years if the current growth rate is maintained. In addition, there are also negative similarities between the two countries that cannot ignored as follows:
Corruptions
When applying for a business license, if you are told that you have to wait for more than a month to be granted a license, you have to spend some administrative "lubrication" on these officials. Traffic police shall accept money and shall not sanction violations of traffic participants.
China was once famous for the bribes that foreign companies have to pay when engaging in doing business in the country. Bribery is still taking place in China but has subsided as the Chinese government's anti-corruption campaign has officially begun since 2012.
Copyright and trademark infringement
Counterfeiting trademarks in Vietnam is a normal occurrence. People not only fake famous foreign brand goods, but also fake many brands of reputable domestic businesses with increasing and widespread scale. Even the control stamps, anti-counterfeit stamps, stamps of origin, etc. have been counterfeited.
China once allowed a chain of coffee shops with the brand "Starsbuck" (famous American coffee company) to operate in the coastal city of Qingdao. China also allowed fashion shops in Beijing to sell clothing that looks similar to the products of Gpa and were blatantly labeled with the Gpa brand. Foreign companies doing business in China often complain that the problems they face in trademark protection are the result of trademark counterfeiters, corrupt officials and weakness in enforcement of intellectual property rights protection.
The traffic is getting worse
In Ho Chi Minh City and Hanoi, two economic centers of Vietnam, and in other big cities, traffic congestion is increasingly complex and taking place regularly. The pedestrians sometimes have to wait a long period of time to get through a red light. Traffic in densely populated areas in Beijing and Shanghai fell into such stagnation around 2000 when more cars appeared on the road.
Employees always seeking for better paid jobs
In China, one may only do a job up to half a year. Foreign companies often pay higher salaries than local ones, leading to a wave of workers switching jobs to be better paid. However, they are not loyal to anyone. Meanwhile, Vietnamese office workers, most of whom are unqualified or lacking in essential skills, are doing the same thing.
Bonny Le - VietnamCredit
Write a comment