Benefit
Attracting Investment and Promoting Exports:
Expanded Market Access: Joining Free Trade Agreements (FTAs) lowers or
eliminates tariffs on Vietnamese products in international markets.
Attracting Foreign Investment (FDI): Economic integration has created a
favorable business environment, drawing international investors due to stable
policies and economic conditions.
Promoting Industrialization: Vietnam gains the opportunity to modernize
industries and adopt advanced technologies through foreign investment and
technology transfers.
Enhancing Competitiveness:
Access to Advanced Technologies: Domestic businesses can learn and use
new technologies from foreign partners.
Improving Product Quality: Increased competition pushes businesses to
upgrade technology and improve product quality to meet international
standards.
Developing Human Resources: Integration enhances workforce skills through
training and exposure to international expertise.
Diversifying the Economy:
Promoting Services: Increased trade, tourism, and investment drive growth in
sectors like tourism, finance, and logistics.
Reducing Market Dependence: International integration helps Vietnam
diversify trade relationships, reducing reliance on a single market.
Sustainable Economic Growth:
Boosting GDP: Exports and investments contribute significantly to GDP
growth.
Job Creation: Growth in industries and services creates many job
opportunities for Vietnamese workers.
Enhancing National Standing:
Strengthening Foreign Relations: Vietnam’s active participation in global
and regional economic organizations boosts its international reputation.
Global Supply Chain Integration: Vietnam’s strategic position and open
policies strengthen its role in the global supply chain.
Reforming Institutions:
Improving Legal Framework: Reforms aligned with international standards
make integration easier.
Enhancing Governance Efficiency: Adopting global standards improves the
effectiveness of economic and social governance.
Promoting Innovation:
Encouraging Startups: Small and medium enterprises gain access to
international resources for innovation.
Digital Transformation: Economic integration accelerates digital
transformation across various industries.
Economic integration brings many benefits but also challenges, such as boosting
competitiveness, protecting workers' rights, and ensuring sustainable development.
CHALLENGE
Economic integration brings many opportunities, but it also poses significant
challenges for Vietnam. Below are the major challenges that Vietnam faces during the
process of economic integration:
1. Intense competition
o Pressure on domestic enterprises: Vietnamese companies, especially
small and medium-sized enterprises (SMEs), face fierce competition
from multinational corporations with superior financial, technological,
and managerial resources.
o Threat to the domestic market: Goods and services from developed
countries with high quality and competitive prices easily dominate the
domestic market, reducing opportunities for Vietnamese products.
2. Development gap
o Outdated technology: Many industries in Vietnam are using old or
outdated technology, causing difficulties in production and integration
into the global supply chain.
o Low labor productivity: Vietnam’s labor productivity is still relatively
low, especially compared to competitors in the region. This also creates
challenges in efforts to develop the economy.
3. Institutional and policy challenges
o Incomplete legal system: The lack of coherence, consistency, and
completeness in the legal system makes it difficult for Vietnam to keep
up with international commitments, hindering the ability to exploit trade
agreements.
o Policy implementation capacity: Vietnam still struggles with the
capacity for effective government management, oversight, and execution
of integration tasks.
4. Dependence on major markets
o Risks from dependency: Currently, Vietnam's imports and exports are
highly dependent on a few large markets (such as China, the United
States, and the EU), creating the risk of being affected by political or
economic fluctuations in these markets.
o Lack of market diversification: Due to strict standards in markets such
as the U.S., Canada, and the EU, Vietnamese products face challenges in
market penetration.
5. Environmental issues and sustainable development
o Increasing environmental pollution: The integration process may
attract pollution-causing industries from abroad.
o Pressure from green standards: International organizations demand
higher sustainability and environmental protection, placing additional
pressure on domestic enterprises.
6. Challenges for workers
o Limited labor skills: International companies demand higher
qualifications from workers, particularly in modern industries.
o Job loss risk: Economic integration and rapid development threaten to
eliminate traditional industries or those that are no longer competitive.
7. Risks from global economic fluctuations
o Impact of crises: Vietnam is still quite vulnerable to economic,
financial, and trade crises, particularly from recessions in major global
powers.
o Exchange rates and interest rates: Export prices are significantly
impacted by changes in exchange rates and monetary policies, which
can positively or negatively affect exports, imports, and foreign
investment attraction.
