Party leader Nguyen Phu Trong plays crucial role in int’l integration, FDI attraction: expert

During his 13 years at the helm of the Communist Party of Vietnam, General Secretary Nguyen Phu Trong made great contributions to Vietnam’s international integration and foreign investment attraction, giving the country "the fortune, potential, position and international reputation it has today", wrote Prof. Nguyen Mai, chairman of the Vietnam’s Association of Foreign Invested Enterprises (VAFIE).

The 13th National Party Congress in 2021 approved the Socio-Economic Development Strategy for 2021-2030 with the orientation: "Arousing the desire for national development; strongly promoting values of Vietnamese culture and people, and the power of the times; mobilizing all resources for rapid and sustainable development on the basis of science, technology, innovation and digital transformation, striving to turn Vietnam into a developing country with modern industry and high average income by 2030 and a developed, high-income country by 2045."

Diplomatic imprints

At the Diplomatic Conference on December 19, 2023, Party General Secretary Trong assessed that foreign affairs and diplomacy in 2023 were an "impressive bright spot among all the country's overall results and achievements."

Last year, Vietnam witnessed 28 visits by high-ranking international leaders, including those of historical significance by Party General Secretary and President of China Xi Jinping, and U.S. President Joe Biden. There were also 22 trips made by Vietnamese leaders to important partners and long-standing friends.

President Joe Biden visited Vietnam on September 10-11, 2023, with the most outstanding outcome being the upgrade of bilateral ties to a comprehensive strategic partnership. Biden expressed extreme pride in the way the two countries and their people have built mutual trust and understanding so that they can handle the painful consequences of the war. He said he believed that the Vietnam-U.S. relationship will continue to reap more achievements under the comprehensive strategic partnership.

Biden cited two famous lines from The Tale of Kieu: "In glory they made up for their past hardships, and their love got fresher and warmer each day," highlighting the efforts of the two countries to seize the potential of the future and great opportunities for prosperity to the people of both countries.

In mid-December 2023, Party General Secretary and President of China Xi Jinping arrived in Vietnam, marking his third state-level visit as head of the Chinese Party and State. This was also his first visit to Vietnam after the 20th Congress of the Communist Party of China.

The visit further strengthened relations between the neighboring countries, with 36 cooperation documents signed - the highest ever number during a visit to Vietnam by the Party General Secretary and President of China.

Over more than 13 years as Party leader, General Secretary Nguyen Phu Trong issued many resolutions, conclusions, and directives on building and perfecting the foreign policy of the Party and State in the Doi moi (reform) era. This was also a period when Vietnam made many great achievements in foreign relations and international integration.

As of March 2024, Vietnam had set up comprehensive strategic partnerships with seven countries, including six developed ones during the time Trong served as Party leader, including Russia, India, South Korea, the U.S, Japan, and Australia.

To date, Vietnam has established diplomatic relations with 193 countries, including seven comprehensive strategic partners, 12 strategic partners, and 12 comprehensive partners.

Vietnam's position and voice have been affirmed at many international forums and multilateral organizations such as the United Nations, the Association of Southeast Asian Nations (ASEAN), the Asia-Pacific Economic Cooperation (APEC), the ASEAN Inter-Parliamentary Assembly (AIPA), the Inter-parliamentary Union (IPU), UNESCO, and the 28th UN Climate Change Conference (COP 28).

The country's international position and reputation have risen in recent years thanks to "Vietnamese bamboo diplomacy." The glorious tradition of Vietnam's revolutionary diplomacy provides solid foundations for the country's foreign and diplomatic affairs, helping the country overcome challenges, take advantage of opportunities to enhance economic, trade and investment relations, and contributing to the successful fulfillment of Vietnam's socio-economic development goals.

According to Foreign Minister Bui Thanh Son, one of the foreign policy "legacies" bearing the mark of Party chief Nguyen Phu Trong is that Vietnam has maintained peace to develop the country amid major and complex global changes. Vietnam's stature has been elevated to new heights with quality, strategic steps, higher political trust, and more practical, effective cooperation with neighboring countries, major powers, important partners, and traditional friends.

"Our country has never had a fortune, potential, position or international reputation as it has today,” Minister Son quoted General Secretary Trong as affirming.

Impressive FDI achievements

Along with foreign relations development and international economic integration, on August 20, 2019, General Secretary Nguyen Phu Trong, on behalf of the Politburo, signed Resolution No. 50-NQ/TW "on directions for perfecting institutions and policies, and improving the quality and effectiveness of foreign investment cooperation until 2030."

This was the first time the Politburo had issued a separate resolution on foreign direct investment (FDI), affirming that the foreign-invested sector is an important component of the Vietnamese economy that is encouraged and facilitated for long-term development, cooperation, and healthy competition with other economic sectors.

After five years of implementing the resolution, FDI attraction has seen positive changes. The FDI sector has made an important contribution to economic growth and transformation towards a digital economy and a circular economy, with increasing quality and efficiency of FDI use.

Disbursed FDI increased from $20.38 billion in 2019 to $22.4 billion in 2022 and $23.18 billion in 2023. In 2020 and 2021, despite the negative impacts of the Covid-19 pandemic, FDI only declined slightly.

Total realized FDI capital from 2019-2023 reached $105.68 billion, equal to 35.5% of the accumulated figure as of end-2023. FDI has gradually become focused on high-tech and future-tech projects, modern services, innovation and creativity, R&D, and training of high quality human resources.

The FDI sector has contributed 22-25% of total social investment capital and 55% of industrial production value, forming a number of key economic sectors such as oil and gas exploration and exploitation, petrochemicals, electronic technology and information technology.

Vietnam has become a production base for smartphones, tablets, and electronic components, accounting for 20% of GDP, 20% of domestic budget revenue, and more than 70% of export turnover, with a structure shifting towards modernity.

According to the Ministry of Finance, in 2022, the total assets of FDI enterprises reached VND9,444 trillion ($372.4 billion), an increase of 7.9% compared to 2021. Of these, five fields accounting for 91% of the total assets of FDI businesses included manufacturing (60%); finance, banking, insurance (10%); real estate (7%); producing and processing of electricity, gas, water and air conditioning (4%); and science and technology (4%).

The Ministry of Finance's data also showed the equity of FDI enterprises hit VND4,069 trillion ($160.45 billion) in 2022, up 11.7% from 2021. Their owners' investment capital increased by nearly 14%, and undistributed accumulated profit reached VND1,012 trillion ($39.9 billion), up 3.8%.

In 2022, FDI enterprises paid VND237.8 trillion ($9.38 billion) to the state budget, accounting for 33.7% of the total budget contributions of the business community in Vietnam. The finance ministry stated that the business activities of FDI enterprises have seen positive changes in terms of asset scale, investment capital, and budget payments.

The ministry estimated that about 122 businesses investing in Vietnam are subject to a global minimum tax, with tax revenue of about VND14.6 trillion ($575.7 million), helping the country increase state budget collection, enhance international integration, and minimize tax evasion, tax avoidance, and transfer pricing. The government will amend and supplement a number of mechanisms and policies such as the national minimum tax and financial incentives to create favorable conditions for FDI enterprises to operate in the country.

FDI enterprises are increasingly asserting their important role in Vietnam's economy. Many foreign investors have been implementing green and sustainable projects, toward harmonious socio-economic development and the restoration and preservation of natural ecosystems. The FDI sector has made an important contribution to Vietnam's sustainable development process.

Many international experts say that Vietnam is a successful model in attracting FDI thanks to its increasingly improving institutions and investment environment, stable politics, and great economic growth potential. HSBC’s researchers said that many technology corporations have made their marks in Vietnam. Half of Samsung's smartphones globally come from Vietnam. This has encouraged other technology corporations to expand their operations in Vietnam.

Notably, Apple of the U.S. has completed the relocation of 11 audio-visual equipment factories to Vietnam. The "trinity" of Apple’s familiar partners in Vietnam, namely Foxconn, Luxshare and Goertek, have simultaneously increased capital and expanded their factories in the ocuntry.

Representatives of the Semiconductor Industry Association and many U.S. businesses have visited Vietnam to explore the investment environment for shifting chip production. According to economic experts, with the cooperation of American technology enterprises, Vietnam is now able to produce semiconductors on a larger scale.

Under the leadership of Party General Secretary Nguyen Phu Trong, the country has overcome countless difficulties and challenges, taken advantage of every opportunity to develop a socialist-oriented market economy, while promoting international integration on the principles of respect for sovereignty, equality, and mutually beneficial cooperation. Vietnam has achieved important socio-economic and international trade and investment achievements that would help its aspiration for prosperity soon become a reality, turning the country into a civilized, fair and democratic society.

* Prof. Nguyen Mai is former Vice Chairman of State Committee for Cooperation and Investment, now Ministry of Planning and Investment.