Vietnam is imitating China in its effort to power its economy and lags behind China by only a decade of development and investment growth.

China opened its doors to foreign direct investments in 1978, then 10 years later, Vietnam followed. Now Vietnam is trying to hold its grip against corruptions, traffic issues and the sinking performances of state-owned businesses as its middle class of work force expands. Such are all trademarks of China’s development in the previous decades.

The similarities between the two isn’t only its trademark developments, but Vietnam’s latest plan to examine a bill to allow the country to run on 3 special economic zones. VnExpress International, Vietnam’s online news platform, reports these economic zones will offer foreign factory investors tariff exemptions and long land leases. China created its first four special economic zones in 1979 to attract foreign investments, now there are a total of 32 in the country.

Government’s Control Over Manufacturing and Exports

Headquartered in Ho Chi Minh City’s Infocus Mekong Research’s CEO Mr. Ralf Matthews, said, governments in both countries focuses mainly on factory work to power its economy and employs a large amount of people from the uneducated populations.

Relying on manufacturing and especially in exports, China’s economy soared at an overwhelmingly high rate of 10% per year over the decades leading to 2010. Vietnam’s economy, on the other hand, has risen by 6% per year since 2015.

Following China’s footsteps a decade ago, Vietnam is heavily relying on a high number of exports of manufactured goods including garment, furniture, electronics and automobiles accessories. A decade later, China is in queue to be a global leader for high-technology services and goods. Companies from Japan, Singapore, South Korea and the West often offshore factory work to China and Vietnam to reduce labor cost. China has been dubbed the ‘World’s factory’ and Vietnam is now called, ‘China + 1.’ This emerging country is now in line to be the world’s destination for investors to expand production to a cheaper country.

“How do you employ a bunch of unskilled workers?” Matthaes said. “Obviously mass manufacturing is one way. I think even Vietnam holds Singapore in high regards in terms of being the greatest model, but it is actually China.”

Results from Controlling a Fast Pace Economic Growth

Specialists pointed that China’s past development and economic growth from manufacturing in the past decade is seen in Vietnam presently. Boston Consultation reported that the middle working class or above in Vietnam, has multiplied from 2014 to 2020 to 93 million, consisting of one-third of Vietnam’s total population. In China, in its large population of 1.38 billion, only 3.1% are among the poor.

Vietnamese also follows the footsteps of Chinese, and switch jobs within months to reach for higher paid jobs in order to purchase new and up to date smartphones and cars, as well as showing off with expensive high-end dinners. In Ho Chi Minh City, the financial center of Vietnam, traffic remains to be chaotic, similar to China’s major cities like Shanghai and Beijing.

Specialists also provided that in China, anti-corruption movements have begun in the country since 2012, and the same has taken place in Vietnam starting last year in 2017.

 Source: Voice of America