In the caliber of Western media, Vietnam 's manufacturing industry has great potential and is vaguely the second "world factory" in Asia. In time, it is not impossible to surpass China to become a "world factory" in the true sense. However, Vietnam's economic size determines that its risk resistance is far inferior to China. When dealing with the fluctuations in the international financial system, it is also under great pressure and cannot be as ease as China.
In the latest statistics of the General Administration of Customs of Vietnam, many details can illustrate this issue. Data shows that in the first half of September, the total value of Vietnam's imports and exports was US$26.34 billion, a significant decline compared with the previous statistical cycle, with a full 25.7%. If this data is further broken down, we can also find that Vietnam rarely experienced a trade deficit of US$845 million in early September, with exports of only US$12.75 billion, nearly US$7 billion less than the same period.
[Vietnam experienced a trade deficit in September]
Among them, industrial products such as computers, electronic products and components, telephones and components, mechanical equipment, instruments and other parts, these are the "mainstagram" of Vietnam's manufacturing industry, but exports have declined to varying degrees.
This is enough to show how bad the risk resistance of Vietnam's manufacturing industry is. What's more, Vietnam's current economic situation is facing three major risks that are difficult to solve. If Vietnam's economic decisions fail, the worst case scenario is that the development momentum is slashed and even falls into recession.
[Vietnam economy faces many unstable factors]
The first risk facing Vietnam's manufacturing industry is the gradually heating up conflict between Russia and Ukraine. Under the impact of the geopolitical crisis, global inflation has intensified, consumers have tightened their spending, and purchasing power has dropped sharply. Markets in major export countries in Vietnam also showed signs of cooling. The most intuitive impact on Vietnam's manufacturing industry is that the factory cannot receive enough orders, and the finished products are squeezed into the warehouse and cannot be sold. This phenomenon is also widely present in Vietnam's wood industry and textile industry, and may be even more serious.
As for the second risk, it is the radical economic policy of the United States. Looking back at the international financial situation in September, it was not very peaceful. In order to protect yourself, the Federal Reserve hikes rate hikes in succession, and the US dollar exchange rate continues to rise, prompting capital to flow back, and harvesting a wave of leeks from developing countries in disguise. Vietnam is naturally among the harvested ranks.
[The Federal Reserve raises interest rates one after another, and Vietnam is under great pressure]
At present, many Vietnamese factories can only receive orders from the United States, and there is almost no business to do in Europe. In other words, the export channel is becoming single. Not only that, as the US dollar appreciates, Vietnam's national currency faces heavy depreciation pressure, and the previous low interest rate advantage has disappeared. The third last risk of
is its own economic structure. In recent times, Vietnam's foreign debt has expanded too quickly. It is urgent to consolidate its own finances and avoid another economic crisis. However, in the short term, it is difficult for Vietnam to stop accumulating risky loans. In addition, Vietnam's foreign exchange reserves are limited and are about to fall below the important mark of US$10 billion, making it difficult to cope with the Federal Reserve's aggressive interest rate hikes.
All these cast a shadow on Vietnam's economic development prospects. What’s even more terrible is that although the cake in Vietnam’s manufacturing industry is big, European and American manufacturers have to share a large part of it. Once foreign capital feels that Vietnam's economic prospects are not good, or is pessimistic about Vietnam's risk resistance and begins to choose to withdraw its investment, Vietnam's manufacturing industry will face a heavy blow.
[The proportion of foreign investment in Vietnam's manufacturing industry is very large]
In fact, withdrawal has occurred. According to statistics, in the past five months, many foreign investors have chosen to withdraw from the Vietnamese market in order to avoid possible economic crises, and the total value of the sold financial securities assets is as high as 960 trillion Vietnamese Dong .
In addition to the above three major risks, the public health crisis of the new crown epidemic cannot be ignored. These are all problems that Vietnam's manufacturing industry has to face. But with Vietnam's comprehensive strength, it is powerless to change this complex situation.
[Vietnam's body is too small, and its ability to resist risks is destined to be inferior to China]
And this is where Vietnam is inferior to China. It is also worth mentioning that when the Federal Reserve raised interest rates at , although most international companies chose to return to the United States, a considerable portion of the funds flowed to China. This also shows that once the international financial situation changes abnormally, the primary choice for foreign capital is China with strong risk resistance.
So the conclusion is already very obvious. In terms of size, Vietnam is only equivalent to one province in China. What Vietnam needs to do at present should not be to regard China as a competitor for the title of "world factory", but should form an efficient cooperation model with China in the industrial chain to achieve complementarity, so as to effectively increase its own risk resistance.
