The conquest of Vietnam by France began in 1858 and was completed by 1884. It became part of French Indochina in 1887. Vietnam declared independence after World War II, but France continued to rule until its 1954 defeat by communist forces under Ho Chi MINH. Under the Geneva Accords of 1954, Vietnam was divided into the communist North and anti-communist South. US economic and military aid to South Vietnam grew through the 1960s in an attempt to bolster the government, but US armed forces were withdrawn following a cease-fire agreement in 1973. Two years later, North Vietnamese forces overran the South reuniting the country under communist rule. Despite the return of peace, for over a decade the country experienced little economic growth because of conservative leadership policies, the persecution and mass exodus of individuals - many of them successful South Vietnamese merchants - and growing international isolation. However, since the enactment of Vietnam's "doi moi" (renovation) policy in 1986, Vietnamese authorities have committed to increased economic liberalization and enacted structural reforms needed to modernize the economy and to produce more competitive, export-driven industries. The communist leaders maintain tight control on political expression but have demonstrated some modest steps toward better protection of human rights. The country continues to experience small-scale protests, the vast majority connected to either land-use issues, calls for increased political space, or the lack of equitable mechanisms for resolving disputes. The small-scale protests in the urban areas are often organized by human rights activists, but many occur in rural areas and involve various ethnic minorities such as the Montagnards of the Central Highlands, Hmong in the Northwest Highlands, and the Khmer Krom in the southern delta region.
Southeastern Asia, bordering the Gulf of Thailand, Gulf of Tonkin, and South China Sea, as well as China, Laos, and Cambodia
phosphates, coal, manganese, rare earth elements, bauxite, chromate, offshore oil and gas deposits, timber, hydropower, arable land
Population - distribution
though it has one of the highest population densities in the world, the population is not evenly dispersed; clustering is heaviest along the South China Sea and Gulf of Tonkin, with the Mekong Delta (in the south) and the Red River Valley (in the north) having the largest concentrations of people
Vietnamese (official), English (increasingly favored as a second language), some French, Chinese, and Khmer, mountain area languages (Mon-Khmer and Malayo-Polynesian)
Ho Chi Minh City 7.298 million; HANOI (capital) 3.629 million; Can Tho 1.175 million; Haiphong 1.075 million; Da Nang 952,000; Bien Hoa 834,000 (2015)
- Conventional long form
- Socialist Republic of Vietnam
- Conventional short form
- Local long form
- Cong Hoa Xa Hoi Chu Nghia Viet Nam
- Local short form
- Viet Nam
- Geographic coordinates
- 21 02 N, 105 51 E
- Time difference
- UTC+7 (12 hours ahead of Washington, DC, during Standard Time)
has not submitted an ICJ jurisdiction declaration; non-party state to the ICCt
Vietnam is a densely populated developing country that has been transitioning from the rigidities of a centrally planned, highly agrarian economy since 1986 to a more industrial and market based economy, raising incomes substantially. In 2016, Vietnam missed its yearly growth target of 6.7% due to environmental issues – drought and salinization - impacting the agricultural sector and low oil prices affecting the extractive sector. However, annual GDP growth was 6.2%, reflecting strengthening domestic demand and strong manufacturing exports.
- External debt stocks
- US$ 77,798,272,000
- Total tax rate (% of commercial profits)
- Real Interest Rate
- Manufacturing, value added (% of GDP)
- Current Account Balance
- US$ 906,000,000
- Labor Force, Total
- Employment in Agriculture
- Employment in Industry
- Employment in Services
- Unemployment Rate
- Imports of goods and services
- US$ 184,506,772,263
- Exports of goods and services
- US$ 189,696,980,606
- Total Merchandise Trade
- FDI, net inflows
- US$ 11,800,000,000
- Commercial Service Exports
- US$ 11,200,000,000
rice, coffee, rubber, tea, pepper, soybeans, cashews, sugar cane, peanuts, bananas; pork; poultry; seafood
food processing, garments, shoes, machine-building; mining, coal, steel; cement, chemical fertilizer, glass, tires, oil, mobile phones
- clothes, shoes, electronics, seafood, crude oil, rice, coffee, wooden products, machinery
- US 21%, China 13.2%, Japan 8.4%, South Korea 5.4%, Germany 4.1% (2015)
- machinery and equipment, petroleum products, steel products, raw materials for the clothing and shoe industries, electronics, plastics, automobiles
- China 34%, South Korea 14.2%, Singapore 6.5%, Japan 6.4%, Hong Kong 5.1%, Thailand 4.5% (2015)
- Country Risk Rating
- Political and economic uncertainties and an occasionally difficult business environment can affect corporate payment behavior. Corporate default probability is appreciable.
- Business Climate Rating
- The business environment is difficult. Corporate financial information is often unavailable and when available often unreliable. Debt collection is unpredictable. The institutional framework has many troublesome weaknesses. Intercompany transactions run major risks in the difficult environments rated C.
- Cheap, skilled labor
- Strong agricultural potential and natural resources
- Development strategy based on openness, a move upmarket and diversification of the economy
- Economy barely effected by the Chinese slowdown
- Shortcomings in the business climate
- Lack of infrastructure
- Unfinished reform of the public sector
- Growing inequality
- Weak banking system
Despite a slight slowdown, growth remained robust in 2016. This trend is likely to continue in 2017. The exporting sectors will continue to benefit from growth in foreign direct investments (FDI), the participation of Vietnam in a growing number of free-trade agreements and from delocalization from China. In addition, the country benefits from the move upmarket of exports, particularly electronics, thanks to FDIs. The country is a hub for production of smartphones and tablets. Moreover, the development of the textile and petrochemical sectors is also dynamic. Despite sluggish global demand, particularly from China, the 3rd largest recipient of Vietnamese exports, the country's external trade will remain positively oriented.
Meanwhile, after years of high and volatile inflation, better inflation control has helped improve consumer confidence, so consumer spending is expected to continue to climb. In addition, the growing middle class and increased household borrowing also helps sustain internal demand, and specifically car sales. Investment is expected to benefit from the acceleration in industrial production and from a national plan to promote infrastructure. Nevertheless, it will continue to suffer from banking system weaknesses which constrain the financing of enterprises.
Tourism is expected to remain dynamic and will continue to support the hotel industry and retail sales. The implementation of an electronic visa system during 2017 is expected to boost the development of the sector, which will, however, still be constrained by infrastructure shortcomings.
Finally, the Vietnamese economy will continue to be a two-speed economy, with foreign-owned companies growing strongly and public-sector companies indebted and hardly profitable.
In 2017, the fiscal deficit will remain high but is expected to shrink slightly. Indeed, although the privatization program of state-owned enterprises has been delayed, the income generated by this program should grow. Public debt will remain high and will continue to rise. It will remain vulnerable to foreign exchange risk as it is denominated almost 50% in foreign currency. In addition, contingent liabilities could call into question the sustainability of the public debt in the medium term in the event of public-sector company defaults.
Furthermore, after experiencing significant capital outflows, forcing the authorities to devalue the dong six times between 2008 and 2011, the country's external accounts have since stabilised. Exports have proved to be resilient in the face of the unfavorable international environment. The current account surplus is expected to increase slightly, despite the strength of domestic demand.
Despite the rise in foreign exchange reserves, they remain insufficient (2 months of imports in 2017). In 2017, the dong will remain exposed to fluctuations in global risk aversion, particularly in connection with US monetary policy tightening.
Finally, the banking system remains fragile because it is undercapitalized and highly dollarized. Despite the creation of a bad bank, credit risk remains significant and undervalued. Moreover, the high exposure of state-owned banks to opaque public-sector enterprises is a further weakness factor.
The dispute over sovereignty in the China Sea between Vietnam and China re-erupted in 2014 with the installation of a Chinese oil platform in waters claimed by Vietnam. This generated strong anti-Chinese sentiment in Vietnam resulting in demonstrations and violence against Chinese interests. China finally dismantled the platform under pressure from the United States and the ASEAN countries have decided to develop a code of conduct with China on this issue. In addition, in November 2015, at the APEC Summit, Vietnam and the Philippines reached a strategic agreement aimed at increasing cooperation between the two countries, including in the resolution of this dispute. In 2017, Vietnam is expected to continue to consolidate its links with Japan.
Meanwhile, despite the likely withdrawal of the United States from the TPP (Trans Pacific Partnership), the country should continue to strengthen its trade integration, both at bilateral and multilateral levels.
In addition, governance is a risk in terms of attractiveness for foreign investors. Finally, the Communist Party continues to control all political, economic and social life.