Strong China stimulus a positive for Vietnamese economy: HSBC economist
China’s recently-announced stimulus package will benefit Vietnam’s economic growth, given the strong links between the two economies, says HSBC chief Asia economist Frederic Neumann.
At a Wednesday seminar held in Hanoi on the release of HSBC’s annual market outlook, he added the caveat of the U.S. economy not falling into recession.
“The stronger the stimulus in China, the better it is for Vietnam, and that means that there's less reason for the State Bank of Vietnam to cut interest rates,” Neumann said.

Frederic Neumann, chief Asia economist at HSBC, answers questions at HSBC’s annual market outlook seminar in Hanoi, October 16, 2024. Photo by The Investor/Minh Tuan.
China’s 2024 economic stimulus package introduces wide-ranging monetary, property and capital market measures aimed at stabilizing the economy and restoring investor confidence. The plan is a response to mounting pressures from a slowing property market, weak consumer demand and global economic uncertainties.
Chinese Finance Minister Lan Foan said last Saturday that the country will issue CNY2.3 trillion (€297 billion or $325.5 billion) in special bonds in the next three months to boost the economy. The aid program is said to be the biggest since the 2007-2008 global financial crisis.
The Chinese government remains committed to achieving 5% growth this year, Neumann noted.
“If the U.S. goes into recession and if China's stimulus doesn't work, the SBV will cut rates,” he added.
For now, HSBC reckons that the U.S. will avoid a recession and China’s stimulus will stem any deceleration even if it does not accelerate its growth.
The U.S. is Vietnam’s largest export market while China is its largest provider of goods.
In case China doesn’t solve its problems of weak consumer spending and overproduction, Neumann said the neighboring giant’s excess capacity will impact Vietnamese companies. In addition, Vietnam will see fewer tourists from China. “This is going to be a drag.”
Elaborating, Neumann said: “How much is that going to impact the Vietnamese economy? If China doesn't solve its problems, I think we leave about half a percentage point of growth on the table, maybe slightly more. If China does bounce back, it will add to the Vietnamese GDP growth rate by about 0.5-0.7 percentage points.”
In its latest macro update on Vietnam, HSBC has projected Vietnam to grow 7% in 2024 and 6.5% in 2025, the highest rates among ASEAN-6.
With this projection, HSBC does not expect the SBV to cut interest rates this year and in 2025. “We think 4.5% is roughly the [policy] rate we're comfortable with here in Vietnam,” said Neumann.
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