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Vietnam Economy's Virus Recovery Touted as 'Pho-nomenal'

VOA News

   Vietnam Prime Minister Nguyen Xuan Phuc was all smiles Sunday on a trip
   to an industrial park, where he inquiredaboutworkers' health, patted
   their children on home visits and admired the speakers being made in
   factories. The trip was part of reopening the economy after curbing
   COVID-19, acrossmuch of the nationwherethere is little sign of the
   pandemic that is raging around the world.

   Bad news elsewhere is good news in some cases for Vietnam, whose 46
   days without local infections let it reopen and gain an advantage over
   other economies. HSBCbankdubbed it "Pho'nomenalVietnam," a reference to
   the iconic noodle soup, in a report last week that said it is the only
   economy in the region that will grow in 2020.

   "We think the headwinds created by COVID-19 and the trade tensions,
   which are hurting so many other economies, are turning into tailwinds
   for Vietnam," said Devendra Joshi and Herald van der Linde, equity
   strategists at HSBC, in the report.

   The trade tensions between China and the United States is only one
   example of news that has been bad for some, such as the consumers who
   are paying higher prices because oftariffs, buthas worked out for
   Vietnam on balance. The Southeast Asian nation has been called the main
   winner in the trade war because companies moved there from China.

   COVID-19 is another example of the bright side for Vietnam. It was not
   immune to the virus, which forced schools and companies to close for
   weeks or months and led to the economy growing only 3.8% annualized in
   the first quarter, the lowest rate in a decade.

   Howeverthe pandemic is one more reason for companies to move to
   Vietnam, analysts say. The emergency led to canceled flights and closed
   borders, which disrupted global supply chains. That got companies
   worried that they were too reliant on single suppliers, so the push to
   diversify has meant more foreign investment moving into Vietnam.

   Social distance

   "COVID-19 and increasing U.S.-China trade tensions should accelerate
   the process of companiesrejiggingtheir supply chains," Joshi and van
   der Linde said.

   The economy has had a patchy reopening since Vietnam lifted the
   national lockdown order for most areas inmid April. People have
   returned to work and school with new measures, from the coffee shops
   that seat customers farther apart, to the grocery stores that place
   tape on the ground to separate people in line.

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