Economic diplomacy: Momentum for Vietnam’s growth

Economic diplomacy will play an essential role in Vietnam’s foreign affairs, becoming an important impetus for the country’s development. 

Prime Minister Pham Minh Chinh speaks at the conference held in Hanoi on April 2. Photos: Nhat Bac/VGP

Prime Minister Pham Minh Chinh shared the idea at a hybrid conference held on April 2, which brought together senior officials from first-tier cities (Hanoi, Ho Chi Minh City, Danang, Haiphong, and Cantho) and representatives from Vietnamese missions abroad.

Participants reviewed what has been done, got undertakings, addressed shortcomings, and pointed out solutions for both short- and long-term action plans to make economic diplomacy feasible for sustainable development, which is in line with Directive No.15 issued on August 10, 2022, by the Secretariat of the Party Central Committee on economic diplomacy for the national development by 2030. It contributes to implementing the country’s socio-economic development for 2021-2025.

Vietnamese missions abroad at the event.

Abiding by competition rules and business code of ethnic

Speaking at the conference, PM Chinh urged stakeholders to take action in a spirit of understanding, sharing a vision for action, working together, sharing benefits, and developing together.

To make the targets possible, he stressed the importance of leveraging the country’s position and strengths to boost exports and investment; making full use of the national strengths to maximize economic diplomacy, people-to-people contacts, and tourism development; tapping flexibility and creativity of the Vietnamese people to diversify supply chains and markets based on innovation, startup, science and technology development.

To balance the benefits and mitigate the challenges, the prime minister stressed that economic diplomacy should both serve the national development and respect the legitimate rights of partners without under any circumstances benefiting from the adverse situation of partners.

“Vietnamese makers and exporters need to solidify their positions by abiding by competition rules and business codes of ethnic to facilitate partners. Do not try to fish in troubled waters -  it doesn’t exist in Vietnamese culture,” the PM shared. 

Minister of Foreign Affairs Bui Thanh Son shares ideas at the event.

Role of economic diplomacy

Minister of Foreign Affairs Bui Thanh Son stressed the significance of economic diplomacy, which is closely led by the prime minister and his deputies. Over the past 18 months, the prime minister has chaired six economic diplomacy conferences.

As a result, three main outcomes have been achieved in 2023, including institutionalizing and implementing economic diplomacy promptly and methodically; maintaining a favorable environment for national development; and contributing to international economic integration.

He emphasized that since the beginning of 2023, economic diplomacy has taken center stage in nearly 60 high-level foreign policy activities of the Party and State, with dozens of economic agreements inked.

In high-level external relations, it focuses on fostering the opening of export markets and attracting resources in emerging industries like the green economy, energy conversion, high-tech agriculture, tourism, and labor integration with major partners in Northeast Asia, Europe, and North America, as well as potential partners in South Asia, Eastern Europe, the Middle East, Africa, and Latin America. At the same time, it mobilizes resources from the international business and the intellectual communities.

Other ideas at the conference focused on the role of Vietnamese missions abroad, highlighting their efforts to remove barriers while promoting trade and investment and connecting foreign investors with local partners.

The Vietnamese missions have supported localities in expanding markets and attracting foreign direct investment (FDI) while drawing lessons for better operations and assistance to foreign investors. At the same time, they must alert relevant agencies and businesses to trade defense instruments and protect the legal rights of Vietnamese businesses abroad. Vietnamese missions are also tasked with mobilizing resources to increase the number of Vietnamese heritage elements inscribed by UNESCO to 62 to promote tourism.

Various agencies have worked together to implement 16 signed free trade agreements (FTA) and speed up negotiations of the Comprehensive Economic Partnership Agreement (CEPA) with the UAE, FTAs with EFTA, and Mercosur while actively seeking countries’ recognition of Vietnam as a market economy, taking initiative in participating in important multilateral economic cooperation mechanisms such as the UN, ASEAN, APEC, Mekong, G7, G77, WEF, among others.

Consequently, economic diplomacy has contributed to bringing Vietnam’s total trade turnover in 2023 to US$683 billion, with a trade surplus of $28 billion, the highest ever; FDI attraction reaching nearly $37 billion, up 32% on year, and disbursed FDI reaching $23.2 billion, the highest ever. 

Minister of Agriculture and Rural Development Le Minh Hoan addresses shortcomings at the conference.

Room for economic diplomacy

Participants identified shortcomings in economic diplomacy, which include delays in implementing agreements reached, unsolved problems with some partners, and loose cooperation among agencies, localities, and businesses.

According to Nguyen Van Khoa, CEO of FPT Corporation and Chairman of the Vietnam Software Association (VINASA), “Vietnam is the chosen country and Vietnamese human resources are the chosen ones” to participate in the world’s semiconductors eco-system. He justified the idea by saying that Vietnam has one million IT engineers and half of them are software engineers ready to move into artificial intelligence (AI) and semiconductors which are in high demand globally.

He suggested “comprehensive diplomacy” for semiconductors and AI by promoting connections with foreign universities to transfer curricula and training manpower. It will help Vietnam attract FDI in the semiconductors industry and brand Vietnam with the strengths of semiconductors.

Minister of Agriculture and Rural Development Le Minh Hoan, meanwhile, said the ministry is determined to turn “products” into “brands” by producing high-quality goods that meet international standards and changing mindsets when working with foreign partners for long-term trade.