Vietnamese status among global playground enjoys boost

Last year saw the country named as the fastest-growing national brand, with its value surging by 29% to US$319 billion, on the list of the world’s 100 most valuable national brands as compiled by Brand Finance, a London-based independent brand valuation and strategy consultancy.

Major changes were first initiated in 2014 following Samsung unveiling a list of 170 components from Vietnamese suppliers for use in its smartphone Galaxy S4 and Tab, which at the time was considered a huge opportunity for local enterprises.

Samsung required 400 million units of battery charger in different types annually, with a profit of US$0.5 each, allowing domestic firms to earn a profit of US$200 million each year.

Despite this, the Vietnamese supporting industry was unable to meet the strict requirements set by Samsung at the time, even for the simplest of components.

The fact that no domestic firms were able to make screws in line with standards set by Samsung showed the state of the country’s ailing supporting industry during this period.

In 2015, four local enterprises became Samsung’s first-tier suppliers, with the country being home to 1,800 supporting industry firms, including 300 businesses participating in multinational supply chains.

Most notably, the number of Samsung’s first-tier enterprises rose from 35 to 42 in 2018, while the number of second-tier suppliers increased from 157 to 170 in 2018.

A total of 240 Vietnamese businesses have so far participated in Samsung’s supply chains, while hundreds of local firms have also become suppliers of spare parts and components for other companies such as Toyota, LG, and Truong Hai.

Since this period, several “Made in Vietnam” products have been launched, with 2015 seeing the locally-developed and high-end smartphone Bphone launched in the local market, a new landmark for the nation’s information technology industry.

Following the launch of Vinfast’s first cars in the local market in 2019, the domestic automobile industry’s position has been greatly elevated due to the sector gradually mastering technologies and participating in the global value chain.

In line with these changes, Vietnam has proactively integrated into the regional and global playground over recent years, with diplomatic ties being established with 189 nations. The country has also set up trade ties  with over 220 economies and become official members of several organisations and international forums.

Vietnam's admission to ASEAN in 1995 marked a shift in the regional integration process, with the country getting involved in several free trade agreements (FTAs).

The nation's entry to the World Trade Organization (WTO) in 2007 opened up a new period by joining negotiations in contents such as agriculture, industry, intellectual property, trade remedies, along with anti-subsidy and dumping lawsuits, which has contributed to protecting the rights and interests of developing countries.

In line with the fulfilment of the WTO’s commitments, the country was able to speed up reforms in trade policies in a transparent manner in line with the international norms, thereby establishing an equal competitive environment and facilitating the market expansion of local businesses.

The comprehensive level of liberalisation brought about by the FTAs has seen the developing country enjoy an array of opportunities and challenges.

Vietnam has so far signed and joined in 15 FTAs, including two new-generations FTAs in the form of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA).

These moves have served to turn the country into one of the most open economies, while also helping Vietnamese businesses to expand into fresh markets, strengthen connectivity, and deeply participate in global supply chains.

Moreover, these FTAs offer fresh impetus to Vietnamese development, diversification of markets, and the enhancement of the adaptability of the local economy.

Upon addressing a conference to review the industry and trade sector’s achievements in 2020 and plans ahead for 2021, Prime Minister Nguyen Xuan Phuc emphasised that the utilisation of FTAs to boost exports has been deployed in an effective manner.

Five months on from the implementation of the EVFTA, exports to the EU market increased by 1.6% to US$15.38 billion compared to the same period from last year.

With regard to CTPPP members, since the enforcement of the trade deal export turnover to Canada last year maintained positive growth with US$4.35 billion, a rise of 11.9%, while exports to Mexico also surged by 12.2% to reach US$3.17 billion.

The country posted a record trade surplus of US$19.1 billion, higher than the figure seen in 2019, a nine-fold increase from 2017 and an 11-fold increase from 2016.

As a result, FDI inflows into the nation rose from US$3 billion in 1995 to US$28.5 billion in 2020, with the country being one of the countries posting the highest economic growth in the region, reaching an average growth of 6.3% over the past 10 years. Indeed, Vietnamese average income per capita also increased from US$277 in 1995 to US$3.521 in 2020.

Meanwhile, the nation’s role and status have been elevated as the country is widely viewed as a model in the ongoing battle against the novel coronavirus (COVID-19) pandemic.

According to Brand Finance of the UK, the country recorded the fastest-growing national brand in 2020, with its value surging by 29% to reach US$319 billion, therefore making it among the list of the world’s 100 most valuable national brands.

This new status has helped Vietnam to rapidly develop, gradually getting involved in adapting, building, and designing rules.

The country can therefore be considered an active and responsible member of the international community which has implemented commitments in a serious manner whilst redoubling efforts to contribute to the regional and global achievements in such fields as politics, security, economics, culture, and society.