Vietnam Records Asia's Highest Economic Growth Rate Last Year... "2.9%, Higher Than China"

Successful COVID-19 Prevention...Only 1,553 Confirmed Cases
Export Increase Benefiting from Supply Chain Restructuring...Growth Without Contraction

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] Vietnam is reported to have achieved the highest economic growth rate among Asian countries last year. Despite sharing a border with China, it was called a model country for COVID-19 prevention and is said to have maintained steady economic growth without any contraction in any quarter. It is expected that Vietnam will continue to experience high growth rates due to benefits from supply chain shifts caused by the US-China trade dispute and continuous export increases.

On the 27th (local time), CNBC reported that, based on the Vietnamese government's estimated economic growth rate for last year and the International Monetary Fund (IMF)'s growth forecasts, Vietnam's economic growth rate grew by 2.9% year-on-year, surpassing China's 2.3%. According to CNBC, economists at Bank of America Global Research evaluated that "Vietnam recorded the highest growth rate while the whole world fell into a deep recession due to COVID-19."

CNBC analyzed that Vietnam's strong COVID-19 prevention efforts combined with benefits from supply chain shifts due to the US-China trade dispute enabled Vietnam's economic growth rate to surpass China's. According to COVID-19 statistics from Johns Hopkins University, Vietnam recorded a cumulative 1,553 confirmed cases and 35 deaths as of that day, making it a model country for prevention measures among developing countries.

Along with successful COVID-19 prevention, the growing benefits from global supply chain restructuring due to the intensifying US-China trade dispute have steadily increased Vietnam's exports, which is analyzed as a major factor driving economic growth. According to Nomura Securities, about 7.9% of Vietnam's total GDP last year was attributed to the global supply chain restructuring caused by the US-China trade dispute. Recently, Vietnam has attracted increased investment as global IT companies such as Apple and Samsung have actively relocated parts assembly factories, and exports have significantly increased.