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Vietnam's success in economic development has been called the "Vietnamese Economic Miracle", but against the backdrop of global economic volatility and continued interest rate hikes by the United States, this miracle seems to be facing a severe test.
The U.S. interest rate hike policy has not only had a profound impact on the domestic economy, but also has an important impact on the global economic landscape, especially for countries that are highly dependent on foreign investment and export-oriented economic models, such as Vietnam.
The arrival of the end of the US interest rate hike means the return of capital and the readjustment of monetary policy for the global market.
For Vietnam, such a change could lead to the withdrawal of funds, affecting domestic investment and economic growth.
The withdrawal of 1,200 trillion VND funds has exposed the fragility of Vietnam's economy and its over-dependence on foreign investment.
This wave of divestment could lead to a slowdown or even a pullback in Vietnam's economic growth.
Vietnam's manufacturing and export operations are already showing clear signs of slowdown.
The adjustment of trade policy by the United States, especially the trade war with China, has caused some manufacturing to move from China to Vietnam, which used to be one of the important driving forces of Vietnam's economic growth.
But U.S. interest rate hikes could dampen that growth momentum, as the repatriation of global capital reduces investment in emerging markets, increases borrowing costs and slows economic activity.
The debt problem faced by Vietnam cannot be ignored. Behind the rapid growth in the past few years is the accumulation of large amounts of foreign debt by the Vietnamese government and enterprises.
With the US raising interest rates, increasing debt burdens and capital outflows, Vietnam needs to prepare for the upcoming debt repayment pressure.
Under such economic conditions, investor confidence may be shaken, which will affect the stability and sustained growth of the Vietnamese economy.
The Vietnamese government is now seeking to diversify its economic development path and reduce its dependence on the single market, especially in the manufacturing and export business to find new growth points.
This includes strengthening economic and trade ties with other Asian countries, such as China, as well as opening up more domestic markets and consumer sectors.
Vietnam is also trying to improve the investment climate, attract more foreign investment, and strengthen its resilience to economic challenges through domestic reforms.
Generally speaking, Vietnam needs to pay more attention to the optimization of its internal economic structure and the deepening of international cooperation while continuing to maintain its policy of opening up.
Only in this way can Vietnam maintain stability and achieve sustainable development in the current complex international economic environment.
During the global economic adjustment, the Vietnamese government's policy choices will have a significant impact on its economic outlook.
For Vietnam, the end of the U.S. interest rate hike cycle marks a new period of adjustment in the global financial market.
Faced with capital outflows and slowing economic growth, the Vietnamese government must take a series of measures to deal with potential economic risks.
First, Vietnam needs to strengthen its economy's capacity for endogenous growth. This means increasing the value of the value chain by promoting innovation and technological upgrading.
In addition, the development of small and medium-sized enterprises in the country, stimulating domestic consumption, and increasing the purchasing power of the people will be important factors supporting economic growth.
Second, Vietnam needs to strengthen financial supervision to guard against excessive volatility in the financial market.
In the case of foreign capital withdrawal, it is essential to maintain the stability of the local currency and the healthy functioning of the financial system.
Vietnam could consider establishing a stricter capital flow management mechanism to avoid the impact of excessive capital outflows.
Third, Vietnam should actively seek diversified external cooperation. We should not only continue to deepen economic and trade cooperation with China, but also open up space for cooperation with other countries and regions.
Multilateral trade agreements and regional economic partnerships will help Vietnam diversify risks and find new markets and sources of investment.
In addition, Vietnam must focus on improving its infrastructure and making industries such as logistics, energy, and telecommunications more efficient.
This will not only attract more foreign investment into the Vietnamese market, but also improve the efficiency of the domestic economy. Effective infrastructure investment will be the driving force behind Vietnam's long-term economic growth.
Finally, Vietnam needs to continuously improve its legal and policy framework to protect the security of foreign and private investment.
Policy continuity and predictability will enhance investor confidence and promote the stable development of the capital market.
Against the backdrop of structural changes in the global economy, how Vietnam responds and adjusts will be the key to testing its ability to implement economic policies and development models.
The wisdom and strategy of the Vietnamese government will determine whether the country can swim against the tide and continue to maintain the vitality and growth potential of the economy.
Only by deepening reforms, opening up the market, and strengthening macroeconomic management can Vietnam ensure the continuation of the economic miracle and move forward steadily in the tide of the global economy.
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