PM Pham Minh Chinh forgets what he has told Westerners about Vietnam’s economy

For a long time, Vietnamese officials have repeatedly asked the United States and Western countries to recognize Vietnam as having a market economy, with the hope of receiving support and incentives. But the United States and Western countries definitely do not admit it.

Most recently, on January 23, Vietnamese Ambassador to the United States Nguyen Quoc Dung called on the United States to stop labeling Hanoi as a “non-market economy.” Ambassador Nguyen Quoc Dung warned: “Maintaining punitive tariffs on Vietnamese goods is not good for the increasingly closer bilateral relationship.”

It is known that after Vietnam and the United States upgraded their relationship to a Comprehensive Strategic Partnership, in September 2023, in October, Prime Minister Pham Minh Chinh, during his visit to the United States, called on the Minister US Finance to end the “non-market economy” label. The US has promised to consider it.

According to US law, the review process will have to be completed within 270 days, that is, around mid-July 2024, Vietnam will receive an answer.

Vietnam is included in the list of “12 non-market economies” by the United States and Western countries, including Russia, China, and some authoritarian countries. That puts Vietnam at a constant disadvantage in US anti-dumping lawsuits, on the grounds of “strong state involvement in the economy.”

Yet, for unknown reasons, the head of the Vietnamese Government – PM Pham Minh Chinh – on February 5 issued a statement, affirming the important role of state-owned economic groups.

Tuoi Tre newspaper reported on February 5 that, at the Conference with the State Capital Management Committee on implementing production and business in 2024, and promoting investment for socio-economic development, PM Chinh said that although 19 state-owned corporations and groups only account for a small proportion, they are an important material force of the state’s economy.

According to observers, Chinh’s statement seemed to ignore the taboo of a market economy, according to US Government standards, which is “strong state involvement in the economy.”

That is similar to the statement of State President Vo Van Thuong, speaking to Chinese leaders during his visit to Beijing at the end of 2023 saying “Vietnam and China together persevere in moving towards Socialism, under the leadership of the Communist Party.” That means, Mr. Thuong admitted, Vietnam, like China, is a country with a “non-market” economy.

Economic experts believe that, in a market economy, there is an important principle, that is, state-owned enterprises should only do what private individuals cannot, or do not want to do. For this reason, state-owned enterprises always have the state behind them, if they participate in all fields, when using resources such as: public assets, land, or budget capital, plus the power of the state, it can suffocate private businesses.

Moreover, current state-owned enterprises are not governed by market principles. They never go bankrupt, because the state protects them, and is ready to come to the rescue.

Reality in Vietnam has shown that most state-owned enterprises operate at constant losses, not worthy of the capital and assets the state has invested in them. The state-controlled media praises that 19 corporations and corporations will bring in profits of VND53 trillion ($2 billion) in 2023, but mainly, profits come from oil and gas exploitation.

Economic experts say that the Vietnamese government wants to accompany and rely on the market, capital and technology from the United States to develop the economy on a high-tech foundation. This forces Vietnam to institutionalize its economy to become a complete market economy, in accordance with the criteria of the World Trade Organization (WTO).

As a reminder, the 3 pillars of a developed country in the world today are: Rule of law; market economy; and a widespread system of civil society organizations, to monitor the corporate state.

Vietnam has a market economic institution with a socialist orientation, unlike anywhere. Meanwhile, if legal policies are arbitrary, they will never reach the destination of rich people, strong country, fair and civilized society./.


Tra My –