VIETNAM’S ECONOMIC RESPONSE TO THE RISE OF CHINA
Vietnam’s economic condition: Vietnam communist party (VCP), after reunification of the country in 1975, actively followed on a economic reform along the socialist in order to improve the economic condition of the country. But the situation became even worst thus leading to adoption of Doi Moi policy in 1986. Doi Moi, followed a series of new policies, which includes developing a multi-sector market based economy, renovating the economic structure, stabilizing the socioeconomic environment, promoting science and technology, and opening up the country’s foreign relations. Thus, Doi Moi policy was not just restricted to economic sector but its impact was felt in all directions- economic, political,…show more content… In recent years, Vietnam’s export markets have experienced large shifts from Europe to Asia and the United States. According to WTO, (2007), the share of exports to Asian countries rose from 22.6% in 1986 to 50 per cent in 2005, whereas that to European countries shrank from 55.6 per cent to only 18.6 per cent during the same period. In particular, after the normalization of US-Vietnam relations in 1995, and the Vietnam-US bilateral trade agreement came into effect in 2001, Vietnam’s exports to the United States relative to its total trade increased dramatically, from 3.65 per cent in 1995 to 7.01 per cent in 2001, and 21.63 per cent in 2006 (Kien and Heo,…show more content… China is easily Vietnam’s number one source of imports, equal to 79% of imports from all of ASEAN, and the latter includes a large amount of refined oil products from Singapore. While Vietnam exports textiles as well as commodities, such as gems and coffee, to developed countries, most of China’s purchases are raw materials. For example, Vietnam exports 70% of its rubber to China, but it buys two-thirds more rubber products from China than it sells. Generally speaking, Vietnam relies on China for a very broad range of its imports, 20% of its total imports, and sells coal, oil, and food products to China. (Zhu,