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Vietnam Aims to Grow its Economy by 7% This Year, Faster Than China

Ralph Jennings

   TAIPEI - Vietnamese officials aim to expand their economy by 7% this
   year, among its fastest rates ever and quicker than world factory
   powerhouse China, due to investment in manufacturing, lack of trade
   disputes and the rise of a middle class.

   The central government has formally decided to pursue GDP growth this
   year of 6.8% to 7%, securities analysis firm SSI Research in Hanoi said
   January 3. Manufacturing will be the "leading growth vector going
   forward, with the service sector forecasted to follow closely behind,"
   the research firm said.

   A 7% showing would rank Vietnam among the 10 fastest-growing economies
   in Asia this year, according to Asian Development Bank data, and place
   it ahead of China. The development bank forecasts China's GDP to grow
   at 6%. GDP, or gross domestic product, means the value of all goods and
   services produced over a given timeframe.

   Money flowing into factories, offices and ports makes up much of
   Vietnam's total, said Song Seng Wun, an economist in the private
   banking unit of CIMB in Singapore. Consumption is now becoming more
   obvious he said.

   Factories, tourism, education

   Foreign-invested manufacturing is expected to lead Vietnam's economy
   this year as it has over the past seven, country analysts say. Minimum
   wages as low as $132 a month and what Song calls "government stability"
   make Vietnam attractive to capital from abroad.

   Investors normally come mainly from Japan, Singapore, South Korea and
   Taiwan. Their Vietnam factories make garments and auto parts as well as
   consumer electronics. In the first half of 2019, foreign-invested
   projects were due to allocate $9.1 billion, up nearly 8% over same
   period of 2018, the Ministry of Planning and Investment said on its
   website.

   Outside manufacturing, analysts point to growth in tourism and higher
   education.

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