#5月财经新势力 #
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Now, the United States is at risk of defaulting on its debt, and the Federal Reserve's continued interest rate hikes are shifting domestic inflation to other countries. Countries like Vietnam, which have a single structure, high dollar reserves, and a heavy debt burden, will bear the brunt. Now, Vietnam's exports have been affected again, and Vietnam's economy is facing a downturn.
How did the United States transfer the economic crisis to other countries? Has Vietnam's economy really "collapsed"? Faced with such a situation, what should the mainland do?
U.S. bonds may face default
As early as early May, Yellen wrote a letter warning the US government that if the two parties could not agree on a debt ceiling in early June, the US debt could face the risk of default.
Once the U.S. debt defaults, it will not only affect the issuance of U.S. pensions, pensions, etc., but also have an impact on the global economy.
However, the two parties in the United States ignore global interests, and are still "ripping each other" each other, and there has been no progress in debt negotiations. On May 20, the White House confirmed that the two parties were at an impasse in debt negotiations.
The United States seems to be unhurried, and we know that the two parties will reach an agreement by the agreed deadline, and some lawmakers in the United States say that the two parties will reach an agreement next week, because this is after all what the United States often does.
But this crisis is clearly different from previous ones.
One is that the United States is facing a more serious economic crisis in the country, and a large number of banks are at risk of bankruptcy. As of this year, several banks in the United States have gone bankrupt.
On the 18th, Yellen privately warned American bankers at a study of banking policy that the impact of a default on U.S. bonds would extend beyond the banking sector.
This is undoubtedly a means for the Biden administration to attract the business community to put pressure on Congress, which shows that the US debt is indeed on the verge of default.
Second, a default on U.S. debt may affect the operation of the U.S. government, and may even lead to a shutdown, after all, the U.S. government has long had a precedent for a shutdown. Congress is furloughed and residents' lives are not guaranteed, which may cause unrest in the United States.
The United States is an important financial market in the world, and U.S. Treasury bonds are an integral part of the U.S. financial market.
Once the U.S. debt defaults, the impact will first occur domestically, and then spread to economies closely linked to the United States, such as Mexico and Canada, and the impact may spread around the world, such as the subprime mortgage crisis in 2008.
Therefore, the risk of default on US debt is huge, and the United States is looking for China's help in the international market on the one hand, and on the other hand, it is "sucking" other small countries to stop its bleeding.
Is Vietnam's economy really "collapsed"?
Vietnam experienced rapid economic development in the past, and in 2022, Vietnam's GDP reached US$400 billion for the first time, with a growth rate of 8%, and imports and exports continued to develop, and Vietnam's economy was improving.
However, no one expected that Vietnam's economy would "collapse so quickly."
First, in terms of exports, Vietnam's exports fell by 11.7% in the first quarter, and in April, exports continued to decline by 17.1%.
We must know that Vietnam is an export-oriented country, and exports account for the vast majority of GDP, so it is not an exaggeration to say that Vietnam's economy has collapsed due to a sharp decline in exports.
In addition, in the past ten years, Vietnam has attracted a large number of foreign investment, and Vietnam has no high-end industries to bear a large amount of investment, resulting in a batch of hot money flowing to real estate.
Real estate attracting a large number of investment will cause problems such as rising house prices, but at the same time, the development of real estate has also driven the development of upstream and downstream industries, such as reinforced cement for early construction, and decoration furniture in the later stage.
Therefore, Vietnam has developed more low-end manufacturing exports and real estate driven development in the past ten years.
But within two years, the means of both developments suffered.
First of all, Vietnam's main export countries are Europe and the United States and other countries, and now, as we all know, Europe and the United States and other countries are facing inflation, consumer demand is declining, especially the United States, the domestic economy has not been cleaned up, let alone Vietnam.
After the epidemic, the strong recovery of the mainland's manufacturing industry has also squeezed out part of the Vietnamese market.
Exports, a driving force for economic growth, are hindered and will affect Vietnam's national economy.
In addition, Vietnam's real estate had a big thunderstorm last year, the Vietnamese government's anti-corruption determination led to a group of real estate bigwigs entering, real estate financing was seriously affected, residents bought houses, enterprises handed over houses are difficult to guarantee, and the decline of real estate, which has led to chaos in upstream and downstream enterprises.
Now, these two factors that have contributed to Vietnam's economic growth have been affected, which is bound to deal a certain blow to Vietnam's economy.
Affected by a series of factors such as the strengthening of financial control by the Vietnamese government and the global economic downturn, Vietnam's foreign capital is also fleeing.
For example, investment by Korean companies in Vietnam is also declining, with investment of only $474 million in the first quarter of this year, down more than 70% year-on-year.
In the first quarter of this year, Vietnam attracted a total of only US$5.45 billion (about VND 12.79 trillion), down nearly 40% year-on-year, and this is only the data of the first quarter, as if international capital smelled something, overnight, withdrew investment from Vietnam.
The United States may harvest Vietnam
Vietnam's problems are not just capital flight, but also foreign exchange reserves and debt.
Vietnam's US dollar foreign exchange reserves have been further reduced, with more than $80 billion in foreign exchange reserves as of May this year, while Vietnam's debt reached more than $170 billion.
The reduction of foreign exchange is ostensibly a single investment structure, but in the face of the harvest of the dollar, Vietnam does not have sufficient capital to deal with it, and there is less room for maneuverability, and there are more financial risks.
While foreign exchange is decreasing, Vietnam's banking sector is also having a hard time. Bank debt is also increasing.
It is this deficiency in debt and foreign exchange reserves that allows the United States to harvest Vietnam.
So how can the dollar be harvested and passed on its own domestic financial risks?
What we need to know is that although the credit of the US dollar has declined, the US dollar is still an important foreign exchange reserve in the world, relying on its own dollar hegemony to transfer the crisis to the world, especially those single economies with a single economic structure and small foreign exchange reserves.
The Federal Reserve raises interest rates, the interest rate on borrowing from U.S. financial institutions to the federal government rises, and the cost of financing increases, resulting in an increase in the cost of loans for banks.
Banks raise lending rates, banks will earn larger interest spreads, and in order to absorb more capital, residents' personal deposit interest rates will also increase. In this way, there are fewer dollars circulating in the market, which can alleviate inflation in the United States.
The interest rate hike will also lead to higher returns on dollar assets such as U.S. bonds, and internationally liquid capital may be transferred from various countries to the United States for investment.
Once a large amount of foreign capital is transferred to the United States, it is bound to cause turmoil in the financial market of the country.
Now, there is a lot of uncertainty in the market, although some countries are looking for new ways of currency settlement, but the dollar is still a sound foreign exchange reserve, so the market will also increase the US dollar foreign exchange, which in turn leads to the strengthening of the dollar index.
The appreciation of the dollar relative to other countries will lead to a decline in the domestic exchange rate, and if you want to exchange the dollar, you must print more domestic banknotes, and more banknotes in the market may cause inflation.
The United States killed two birds with one stone, printing a lot of money during the epidemic, and passing on the risk to other countries when it caused inflation, and the dollar also appreciated.
All this stems from the hegemony of the dollar, which is linked to oil, which in turn is an indispensable energy source. For international trade, the dollar must be used, so that no one has a choice.
The United States uses this to transfer inflation to other countries, and the most vulnerable are those countries with a single economic structure, few dollar foreign exchange reserves, and no more room for manoeuvre. For example, Zimbabwe, Vietnam and other countries.
Therefore, Vietnam may be harvested by the United States.
The reason is that Vietnam has not mastered core science and technology, and there is no complete industrial chain in China to support the status of "world factory", and it is first at a disadvantage in competition with other international economies.
Therefore, Vietnam should accelerate the development of innovative science and technology, but at present, as an emerging country, Vietnam should vigorously develop education and cultivate talents, and the development of talents can provide impetus for sustainable economic development.
Not only Vietnam, but also the mainland should realize industrial transformation as soon as possible, adhere to scientific and technological innovation, balance its trade structure, and diversify investment to diversify risks.
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