China’s economy and implications for Vietnam

Since around 2020, significant internal and external changes have thrown China’s economy into a more challenging cycle. China’s economic situation significantly affects Vietnam’s economy. The new phase of China’s economy Since it launched reforms and opened up, China’s economy has grown at breakneck speed, averaging out at 10% over a long period of about 30 years until 2011. From 2012 to 2018, economic growth slowed but maintained a rate of 7-8%. This was also the period when Chinese leaders became confident in their economic, military, and diplomatic power, planning to realize the “Chinese Dream” of building China into a modern socialist superpower with significant influence on the international stage. To concretize this ambition, China launched the Belt and Road Initiative (BRI) in 2013 and announced the Made in China 2025 plan. One of the key characteristics of China’s economy is its very high investment-to-GDP ratio and very low personal consumption ratio. This trait, rooted in the high-growth phase, has now become a structural issue destabilizing the economy. Furthermore, the focus of investments has shifted from industry to housing construction, becoming the main cause of the current economic downturn. Since the mid-2000s, China’s investment-to-GDP ratio has exceeded 45%, while its personal […]