Lucia Millar · 

B.A in International Trade Law, Foreign Trade University of Vietnam (Graduated 2015). Answered December 11, 2024. Quora.com

No. It is not. Vietnam is a one-party socialist state that differs from the Soviet Union’s model. Interestingly, now, Vietnam’s economy is capitalist more than most of the so-called capitalist countries.

The total value of Vietnam’s annual exports and imports is approaching 1,000 billion USD, while Vietnam’s GDP is only around 500 billion USD. This indicates the extremely high openness of Vietnam’s economy. Although 1,000 billion USD may not be a large figure compared to economic powers like the US, China, or Germany when compared to what Vietnam had just 10 years ago, it represents significant growth and openness. This reflects a fundamental shift in economic management thinking from a Soviet-style model to a free market economy in Vietnam.

Vietnam PM, US chipmaker Nvidia CEO explore Hanoi nightlife

One of the reasons Vietnam attracts significant foreign investment and technology is its legal system, which is well-structured, transparent, and continuously updated to align with the changes of globalization and the norms and standards of international law. The speed of legal changes and adjustments in Vietnam is rapid and timely, responding to the needs of investors based on a win-win principle. Almost all business sectors in Vietnam operate under the principle that you can engage in any business activity that is not prohibited by law, rather than the mindset of only being allowed to operate within the limits set by law.

Prime Minister Pham Minh Chinh and a delegation of leaders from 18 enterprises and groups belonging to the Nghiem and Trang families (China) have engaged in activities to promote investment and economic development between Vietnam and China.

Large enterprises, whether from China or the United States, do not lack funds or investment plans. What they need is a government commitment to stable legal policies and support for infrastructure, such as electricity and transportation systems. In countries where the political system is heavily influenced by local oligarchs and policies change according to the interests of different factions, it becomes difficult to maintain such commitments. However, in Vietnam, local tycoons are no way to guide Vietnamese politics.

Chinese investors to Vietnam

The fact that Chinese companies continue to invest in Vietnam, despite the frequent tensions between the two countries in the South China Sea, indicates that the Vietnamese government separates business issues from political ones. This allows them to respect market principles and commitments to ensure that Chinese businesses can operate stably in Vietnam.

Furthermore, there is no situation where local officials or grassroots authorities try to pressure Chinese or foreign companies to benefit a group of local oligarchs. This policy creates a favorable and reliable investment environment, encouraging foreign businesses to continue investing in the Vietnamese market.

The reason for Vietnam’s proactive opening of its economy, promoting globalization, and readiness to compete with global partners stems from historical lessons. In the mid-19th century, Vietnam recognized its technological and economic backwardness compared to Western countries. However, instead of opening up, the feudal court isolated itself with a policy of closing the country and halting trade. The consequences of this policy led to significant backwardness, resulting in Vietnam falling into colonial subjugation for the next 100 years. After gaining independence, Vietnam spent an additional 50 years fighting to build peace. Therefore, after the end of the national defense war against Chinese invaders in the late 1980s, Vietnam immediately opened its economy. The government regarded the end of the Cold War as an opportunity for the entire nation to seize and develop, thereby creating conditions for integration and sustainable development in the global economy.

Lusia Millar