With the support of the United States, Vietnam wanted to emulate China's development principles, embark on the road of industrialization, and replace China as the world's factory, but as soon as the US monetary policy was tightened, Vietnam was completely exposed, and there were three killings in the exchange rate of stocks and bonds. How confident it used to be, how embarrassed it is now, now Vietnam is once again aiming at China, and wants to use China to help tide over the difficulties, should we help?
Why can't Vietnam replicate China?
The harvest of the United States has uprooted Vietnam's wealth, more than a decade of efforts have come to naught, and the ambition to replace China as the world's factory has also been brutally educated by the cruel reality.
The Vietnamese dong has depreciated by more than 60% since the beginning of the loose monetary policy in the United States after the subprime mortgage crisis in 2008, and has also depreciated by 23% since the high point in 2021.
Vietnam's Ho Chi Minh Index retreated from a peak of more than 1,500 points to more than 840 points in a year, a drop of as much as 44%.
Vietnam, which once had a heart higher than the sky, is now ruthlessly harvested by the financial stick of the United States, and Vietnam's replacement of China is largely just wishful thinking on the part of Vietnam.
So why can't Vietnam replicate China's economy?
Actually, the United States thinks that the reality of Vietnam is very simple, and they think that Vietnam should become a representative of the liberal economy.
That's why they chose Vietnam, which is now a stereotype in Asia, because India's caste system and ethnic contradictions make Vietnam more suitable.
However, after so many years, Vietnam has not been able to achieve this goal, and even if it has made progress, it is only a major exporter like South Korea.
Moreover, Vietnam's various industries, including raw materials and electricity, are inseparable from our country.
So, Vietnam is now like a part of our national economy, an extension of our economy, and to put it bluntly, Vietnam's development is still beneficial to us.
The United States believes that China's rise benefits from the "demographic dividend", so a populous country like India and Vietnam can naturally replace China, in fact, this also shows that the United States does not understand the reasons for the success of China's manufacturing industry.
The success of China's manufacturing industry, the result of the efforts of billions of migrant workers for several generations, and the hard-working quality of Chinese and even East Asia determine the rapid growth of China's economy.
In addition, Vietnam has a weak industrialization base and does not have a complete industrial sector, not to mention Vietnam, even India is facing the same problem, and it may not be completed in the future.
Most of Vietnam's manufacturing industry is China's manufacturing industry, such as Apple's mobile phone and mobile phone industry chain, more than 80% of the parts and raw materials need to be imported from China.
Summer is coming, Vietnam is in the tropics, and there is a serious shortage of electricity, and last year, there were rotational power outages from mobile phone manufacturers including Samsung and Apple.
Vietnam had no choice but to ask China for help, and the cross-border import of mainland electricity into Vietnam ensured the smooth progress of Vietnam's manufacturing industry.
Now that hundreds of trillions of VND have been withdrawn, a real estate tycoon in Vietnam alone has caused a quarter of Vietnam's foreign exchange reserves to be lost, and Vietnam's economy has been in recession for more than 10 years.
Today's Vietnam only came to its senses after touching the southern wall.
What you may not know is that Vietnam's first billionaire was imprisoned for embezzlement and was the country's largest property developer.
But after a series of scandals broke out, the Vietnamese side announced that she had fraudulently borrowed a full 1,000 trillion VND, equivalent to about 290 billion yuan, half of which went overseas and could not be recovered.
This may seem like a lot, but it accounts for almost 10% of Vietnam's gross domestic product (GDP) in 2023.
If we extrapolate further, the proportion will be even larger, even close to or more than 15%.
The reason is simple, she has accumulated all this wealth over the years.
If converted to our China's GDP, it is incredible, equivalent to 600 billion US dollars, more than 4 trillion yuan, compared with her, China's richest man Xu Jiayin can only be regarded as a piece of cake.
Before 2020, she worked mainly in the real estate industry, and later entered the Vietnamese banking industry, trying to control the Saigon Commercial Bank of Vietnam through acquisitions, only to be revealed.
The reason why she became the richest man in Vietnam is closely related to the previous government that came to power. She managed to win 8 of Vietnam's 10 government projects at a much higher price than the market price.
Many parts of Vietnam owe her debts, but this improper method of obtaining projects has also planted the seeds for her future difficulties.
However, with the global economic downturn, especially the slowdown in Vietnam's exports and the interest rate hike in the United States, a large amount of hot money has fled Vietnam.
This led directly to the bursting of Vietnam's real estate bubble, a sharp drop in land sales fees, and a sharp increase in government debt, which in a sense was actually the harvesting effect of the dollar.
There are already differences between the North and the South in Vietnam, that is, South Vietnam and North Vietnam in the past, representing different interest groups. She is the representative of Southern Capital and even overseas capital.
We all know that most of the grievances between us and Vietnam stem from the self-defense and counterattack war against Vietnam in those years, but we also had a sweet period with North Vietnam represented by Ho Chi Minh.
Now, after experiencing the harvest of American capital, Vietnam is finally beginning to realize the seriousness of the problem.
The harvest has caused significant scars to Vietnam's economy and international reputation.
The aspirations of the past are only vestiges, and the country's development seems to have lost its direction, but life is unpredictable, and crises can also be opportunities for transformation.
Vietnam may need to take this opportunity to reflect on itself and seek new ways to truly grow.
They began to change their attitude towards China, which led Vietnam to seek cooperation with China again, the construction of the China-Vietnam high-speed railway, and even the fact that Vietnam is joining the BRICS.
It's really changing, and so fast.
Planning to join BRICS?
Vietnam's economy is vulnerable to external factors, such as fluctuations in oil prices and US dollar interest rates and currency depreciation, and its manufacturing sector is still in its infancy, despite its abundant human resources.
Relying on the support of low-end industries, the added value is small, and the single economic structure poses the biggest challenge, with 70% of Vietnam's total exports consisting of no more than 10 single products such as textiles, aquatic products, footwear, rice, electronics and coffee.
However, without a strong national industrial base and more rigorous financial policy support, whether it is the country's grand ambition or the ardent expectations of capital, it may come to naught.
Vietnam is struggling to become a new global factory, and many factories are struggling due to insufficient infrastructure, and the credit risk of Vietnamese companies is becoming increasingly prominent.
If the export industry continues to decline, Vietnam's economy may fall into a 20-year recession, and the actual gap with other countries' manufacturing industries will further widen.
Vietnam has been staring at these things, and day by day they see it more clearly, they feel that they can no longer be led by the nose by the United States, so they began to look for other ways and plan to join the BRICS.
In the case of the United States constantly threatening countries not to join the BRICS, Vietnam, as a quasi-ally of the United States, is second only to the Philippines in Southeast Asia, and Vietnam's accession to the BRICS was unthinkable a year or two ago.
According to a recent report by Huanqiu.com, when the Vietnamese Embassy in Russia answered a reporter's question, it said that Vietnam is now considering the question of whether to join the BRICS and how to join the BRICS.
Earlier, South Africa's foreign minister also said that Vietnam wants to join the BRICS.
Recently, Vietnamese diplomats in Moscow have also made it clear that some Southeast Asian countries also want to join the BRICS, and Vietnam is actively discussing doing so.
Russian Foreign Minister Sergei Lavrov said in March that Russia would assume the rotating presidency of the BRICS summit in Kazan in October.
At that time, full member states and those countries participating in the BRICS+ dialogue will be invited to participate, and Vietnam should have a good chance of participating.
In fact, Vietnam's participation in the BRICS and undertaking the downstream links in China's manufacturing industry chain is the best way out for Vietnam's manufacturing industry, which is to act as China's foundry base, and sell it with the US trademark after the production is completed, so as to circumvent trade barriers.
South Korea has also made significant investments in Vietnam, with Samsung alone accounting for 20 percent of Vietnam's total exports, but most of the components for these products come from China.
Vietnam's economic and trade structure is clearly unbalanced.
Although Vietnam maintains a trade surplus, this is mainly due to the contribution of foreign investment, and the local industry has always been in deficit.
In other words, a large part of Vietnam's US$100 billion reserves are foreign capital recurrent surpluses, which can be withdrawn at any time, and are not Vietnam's own wealth.
Due to the lack of foreign exchange reserves, the stock market has fluctuated violently, the banking sector is facing a crisis, and the real estate market is in turmoil, if two decades ago, the Vietnamese dong would have been the victim of a financial attack with a very high hit rate.
Although Vietnam's foreign exchange controls have some effect, offshore short selling can still be realized, so the effect is limited.
However, these two factors are not effective in resisting the greed of capital, and it is China behind the big bears that really stops them.
Not that China will shelter Vietnam, but because the renminbi has become an international currency alongside the dollar.
In the past, the bears profited by manipulating the dollar exchange rate, and countries had to borrow from the IMF to cover their losses, and then were forced to accept many of the IMF's demands, including opening financial markets and allowing the dollar to flow freely.
Now that the situation has changed, when the dollar reserves are insufficient, it can borrow renminbi from China to exchange for dollar debt.
Although China will also make corresponding conditions, it will not be too harsh because of its competitive relationship with the dollar.
In addition, China's reputation among developing countries is better than that of the United States and it does not make excessive claims.
In the near future, we are in a critical period of de-dollarization, and the benefits of replacing the dollar alone can cover the costs, let alone ask for sky-high prices.
Vietnam has signed a local currency settlement agreement with China, which provides it with a way out, which is why Vietnam is now making a timely U-turn and at least taking balancing measures between China and the United States.
Information sources:
$24 billion! Vietnam's government is bailing out Saigon Commercial Bank "on an unprecedented scale" Wall Street See
"Russian media said that Vietnam intends to join the "BRICS"" Global Times
"The local currency continues to depreciate, Vietnam has set off a crazy gold rush", Beijing Business Daily reported on May 13
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