Vietnam targets growth surge, hi-tech shift

Rising status: A street vendor pushes her bicycle past an art gallery in Hanoi. The country is targeting to raise its profile beyond a low-cost labour destination to a centre for science and technology. ─ AFP

HANOI: Having sidestepped the worst of the coronavirus pandemic so far, Vietnam aims to rev up its economy over the next five years, trusting on its custom-tooled mix of free trade deals, privatisation and tight Covid-19 curbs.

Armed with a raft of free trade deals envied by regional peers and increasingly luring factories away from China, the ruling Communist Party has formally approved ambitions to raise growth beyond an annual 6% in the pre-pandemic era to 6.5%-7.0% for the 2021-2025 period.

In an economic development blueprint confirmed at its five-yearly congress, it said it would boost its growing role as a key manufacturing hub for global giants like Samsung Electronics Co and Intel Corp.

At the same time, the party is targeting raising the country’s profile beyond a low-cost labour destination to a centre for science and technology.

With more than a dozen free trade agreements now under its belt, Vietnam aims to expand and diversify export markets, the party said.

The country has reaped the benefit of China and the United States, its largest trading partners, being locked in a trade war that has seen Western manufacturers look to move more and more of their production out of China – with Vietnam a popular choice.

Speaking after the congress, party general-secretary Nguyen Phu Trong – re-selected to serve a rare third term as party chief on Sunday – said Vietnam would aim to be a fully developed country by 2045, and that an ongoing crackdown on corruption across party ranks would continue.

The lofty 2021-2025 targets come as Vietnam recoils from its worst outbreak of Covid-19 in nearly two months, a reminder that future success will depend in the short term at least on keeping the virus at bay.

Last year’s 2.9% growth would have been welcome in many countries around the world, but was the worst year in decades for Vietnam’s economy as it soaked up the impact of tight quarantines, border closures and other anti-virus curbs.

Despite the pandemic, in January, a unit of Taiwan’s Foxconn Technology Co Ltd, a key Apple Inc supplier, obtained a licence to invest US$270mil in the country as it is moving some iPad and MacBook computer assembly from China. Meanwhile US chipmaker Intel said it raised its investment in Vietnam by US$475mil to US$1.5bil.

The country will “focus on measures to basically complete the elements of a socialist-oriented market economy, better handling the relationship between the state and the market and society, ” according to the party’s economic blueprint. ─ Reuters

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