A Tiger Cub Preparing for It's Hunt - The Rise of Vietnam?

On June 13th 2025, Vietnam was officially admitted into the BRICS, as the 10th member of the organisation’s partner country network, which is short of full-membership. Besides becoming a BRICs partner nation (Brazil, Russia, India, China and South Africa), Vietnam also holds membership in other international organisations (CPTPP, RCEP, ASEAN, APEC, WTO, The Non-Aligned Movement and OIF), which is linked to the nation’s Bamboo diplomacy.

Vietnam has a population of 101 million people, which makes it the 16th largest population globally. In terms of GDP, Vietnam is expected to become the 12th largest economy in Asia and 5th largest economy within South East Asia. Moreover, Vietnam’s GDP per capita is expected to rise to $4,783, ranking 124th globally in 2025. While Vietnam’s GDP per capita remains modest compared to other Southeast Asian nations, the country is making progress.

Key Definitions:

Vietnam is one of the five tiger-cub economies (Indonesia, Thailand, Malaysia and The Philippines), which are newly industrialised nations based in South East Asia. The unique case of Vietnam in comparison to other tiger cub economies is, the nation’s political system and economic policies are both modelled on China’s state-led capitalism approach ( five year plans, a large domestic market, export growth and use of capital controls).Vietnam is poised to become one of Asia’s major economies going into the next decade and could achieve its ambitions of becoming a new economic tiger.

Domestic Economy:

                                                  Figure 1 - Vietnam's Annual GDP growth between 1980 - 2025 (IMF) 

Figure 1 highlights the number of economic challenges Vietnam has experience since the 1980s (End of The Vietnam War, Asian economic crisis, 2008 financial crisis and 2020 covid crisis), the nation has managed to always achieve a recovery from each setback. Vietnam recently achieved a real GDP growth of 7.1% in 2024 (IMF, 2025). According to the recent OECD report (2025), Vietnam is expected to achieve 6.2% GDP growth for 2025 and 6.0% in 2026. This would be on the back of domestic demand, while export demand and foreign direct investment inflows will be weaker until policy uncertainty dissipates.

Private consumption will be supported by continued increases in real wages and employment, with investment buoyed by accelerated public investment disbursements. Inflation is projected to rise due to strong domestic demand, and there is a risk that these inflationary pressures turn out stronger than projected, although lower export demand could weaken them.

As foreign direct investment and exports have been Vietnam’s main engine of growth, higher trade barriers and continued policy uncertainty constitute major downside risks to the nation’s outlook. If trade barriers in export markets diminish, the nation’s attractiveness as an investment destination, growth could weaken substantially.

          Figure 2 - Tables currently highlighting the current state of Vietnam's labour market and inflation levels (OECD, 2025)

Based on the data from figure 2, final consumption, gross capital formation and exports of goods and services all contributed to a steady expansion. The unemployment rate has decreased to a historic low of 2.2% in March 2025. Thus, as the underemployment rate has fallen, the labour force participation has increased. Headline inflation has declined from its recent peak of 4.4% in May 2024, reaching 3.1% in April 2025. Core inflation fell to 2.5% in September 2024 but has since begun to pick up again.

                                                    Figure 3 - Vietnam's demand, output and prices (OECD, 2025)

Based on data from figure 3, exports of goods and services increased significantly by 15.5% in 2024, after a mild contraction in 2023. Exports to the United States accounted for 30% of Viet Nam’s exports of goods and increased by 23.2% in 2024. This makes Viet Nam vulnerable to higher US import tariffs. Moreover, exports to China, (Viet Nam’s second largest export market), were essentially flat in 2024. These trends continued in the first three months of 2025. Foreign direct investment has been a driver of growth and increased since mid‑2024.

Hence, Vietnam is viewing these three sectors: finance, energy and transport, which can help the nation secure stable long-term growtt.

Financial Sector — July 9th 2025: The newly passed Resolution №222/2025/QH15 on International Financial Centres (IFCs), effective on 1 September 2025, marks not just a policy shift, but a bold reimagining of Vietnam’s role in the global financial ecosystem.

• Twin-City Financial Hub: Ho Chi Minh City and Da Nang are designated as Vietnam’s dual IFCs, both operated under a unified legal and operational framework, each focusing on complementary financial functions.
• Investor-Friendly Access: Foreign investors benefit from liberalised entry, 100% ownership rights, and exemptions from Vietnam’s standard investment licensing and foreign exchange controls.
• Unprecedented Incentives: The Resolution offers up to 30 years of 10% corporate income tax, personal income tax exemptions for foreign experts until 2030, long-term land use rights, and streamlined capital mobility.
• Fintech & Sustainability Focus: Dedicated regulatory sandboxes, green finance incentives, and non-refundable innovation grants aim to position the IFCs as hubs for digital finance and ESG alignment.
• Modern Legal Environment: English is an official working language. International arbitration is promoted, and parties may waive annulment of arbitral awards — enhancing legal certainty and cross-border compatibility.

Energy Sector — 17th April 2025: Vietnam has officially approved a revised version of its national power development plan, allocating $136bn (€119bn) by 2030 to strengthen long-term energy security and including nuclear power for the first time. The updated plan makes solar power the country’s leading energy source, overtaking coal.

• By 2030, solar energy is expected to contribute over 25% of Vietnam’s electricity mix. In comparison, liquefied natural gas (LNG) and coal are projected to account for 12.3% and 16.9% respectively.
• The plan also formally incorporates nuclear power into Vietnam’s energy structure, with the first plants planned to come online between 2030 and 2035. Installed nuclear capacity is projected to reach from 4 GW to 6.4 GW, equivalent of around 4–6 large-scale nuclear power plants.
• The government said another 8 GW of nuclear capacity would be added to the mix by mid-century.

Transport Sector — 13th February 2025: Lawmakers passed the investment policy for the Lao Cai — Hanoi — Hai Phong railway during a special parliamentary session. This decision marks a significant milestone in the country’s efforts to modernise infrastructure.

• The infrastructure includes a single-track, 1,435mm gauge railway with speeds reaching 160 km/h. It accommodates both freight and passenger services, ensuring efficient transportation.
• Stretching across nine provinces, the route passes through Hanoi, Yen Bai, Phu Tho, and several others. Authorities highlight its importance for economic expansion and national security.
• Vietnam plans to finance the project through public investment, ensuring safety with modern electrification. The government’s strategy prioritises efficiency while incorporating cutting-edge rail technology.
• Officials intend to accelerate implementation by applying special policies and mechanisms. To streamline procedures, they have exempted the project from certain financial assessments.
• The country is collaborating with China to utilise its expertise in railway technology. This cooperation is expected to enhance the project’s efficiency and technological advancement.

Foreign Policy — Bamboo Diplomacy in Action:

The image of the bamboo is deeply embedded in Asian culture and diplomacy. In the case of Vietnam, the nation’s bamboo diplomacy embodies flexibility and pragmatism, with independence and national interests as its basis.

Following the 1986 Doi Moi reforms implementation, Vietnam has shifted from an ideology-driven foreign policy to one that is based primarily on national interests and the principles of independence, self-reliance, multilateralism, and diversification.

This has allowed the country to build a diverse network of comprehensive and strategic partnerships to maintain a high level of socioeconomic development and to gain prestige regionally and internationally.

This is evident in the nation recently joining BRICS as a partner nation and recently announcing a new trade deal with the United States to avoid heavy tariffs being imposed on the nation.

BRICS Membership — June 13th 2025: BRICS officially welcomed Vietnam as “a partner country”, marking a significant milestone in Hanoi’s foreign policy. This decision reflects a carefully planned strategy, developed over years, to diversify Vietnam’s international relations and strengthen its position in a multipolar world.

• By aligning with BRICS — a bloc comprising Brazil, Russia, India, China, and South Africa, and recently expanded to include other emerging economies –Vietnam aims to reduce its dependence on specific partners while navigating complex global dynamics.
• Vietnam’s relationship with the United States, elevated to a comprehensive strategic partnership in September 2023, has faced challenges since the re-election of President Donald Trump.
• Hanoi, acutely aware of these tensions, seeks to balance its economic ties with the US by deepening engagement with other global players. Joining BRICS is a strategic step in this direction, aligning Vietnam with a bloc that collectively represents over 40% of the world’s population and a significant share of global GDP.

USA-Vietnam New Trade Deal — 6th July 2025: Vietnam breathed a sigh of relief when US President Donald Trump announced a trade deal had been struck between Hanoi and Washington. The Vietnam Stock Index reached its highest level since April 2022, indicating confidence that export stability had been achieved.

• On the face of it, the deal is highly unbalanced, with US exports to Vietnam enjoying tariff-free market access, while Vietnamese exports in the other direction now face a 20 per cent rate, slightly over twice last year’s average rate of 9.4%.
• The rationale for the skewed maths, according to supporters of the Trump administration’s “America-first” trade policy, is that such measures are necessary to balance US-Vietnamese trade. Hanoi currently enjoys a surplus in excess of US$100 billion.
• Furthermore, the new rate is vastly lower than the 46% that Trump unveiled in April against Vietnamese goods.The deal also has a more controversial provision that imposes a 40 per cent tax on goods that are transshipped to the US from a third country via Vietnam, with the measure specifically aimed at China.
• While the extent to which China uses Vietnam as a transshipment point to avoid US tariffs is unclear, Vietnam has long been considered the beneficiary of the tariffs first slapped on China during the first Trump administration and maintained through Joe Biden’s presidency.
• Vietnam’s trade surplus with the US increased from around US$39.5 billion in 2018, the year that the trade war began in earnest, to a record US$123.5 billion last year, according to American government statistics.

Culture Lens — The ongoing revival of Ca Tru in Vietnam:

In the case of Vietnamese culture, Ca trù is a complex form of sung poetry found in the north of Viet Nam using lyrics written in traditional Vietnamese poetic forms. Ca trù groups comprise three performers: a female singer who uses breathing techniques and vibrato to create unique ornamented sounds, while playing the clappers or striking a wooden box, and two instrumentalists who produce the deep tone of a three-stringed lute and the strong sounds of a praise drum.

In 2009, UNESCO granted recognition of Ca Tru on the List of Intangible Cultural Heritage in Need of Urgent Safeguarding. This decision had a significant impact on the status and practice of ca trù in Vietnam. After decades of maligning and neglecting the tradition for most of the 20th century, the Vietnamese state now proudly celebrates ca trù as national heritage and a symbol of cultural identity.

• Revival initiatives supported by state-run organisations (like the Vietnam Musicology Institute) and international agencies (like UNESCO and the Ford Foundation) have increased prestige and participation. The Vietnamese state has established a network of ca trù clubs across the country and organised large national festivals.
• In addition to musical performances, ca trù festivals have showcased newly reconstructed dances, such as the “lantern dance” (múa đèn), which experts believe was performed at royal events and village festivals in the pre-colonial era. Since the UNESCO inscription, some Hanoi-based clubs have also shown entrepreneurial flair by performing for tourists in the city’s historic quarter.
• Despite the benefits of ca trù’s modest revival, some musicians and aficionados are wary of the sudden increase in attention stimulated by the UNESCO inscription and are critical of the progress that has been made to ensure the art form’s sustainable future. An often-voiced concern is the lack of a long-term education strategy to nurture musicians’ skills and develop appreciative audiences who are knowledgeable about the complex sung poetry and musical aesthetics.
• For contemporary audiences, classic ca trù poems dating from the eighteenth and nineteenth centuries are difficult to understand due to the use of old Sino-Vietnamese terms and archaic literary allusions (see lyrics for the first two audio selections, “Bắc Phản” and “Mưỡu / Hát Nói”).
• Efforts to safeguard endangered music traditions typically emphasise the preservation of the “authentic,” and this can lead to overlooking and even discouraging innovation and change. In the case of the ca trù revival, there has been an emphasis on promoting nationalist sentiment and representing the past, rather than encouraging innovation. Yet some musicians have shown an interest in pursuing new musical directions alongside preserving tradition. In 2009, the Ca Trù Thái Hà Ensemble collaborated with an experimental music group called Đại Lâm Linh, led by male pianist and songwriter Đại and two female singers, Lâm and Linh.

Critique:

Based on all three topics covered in the case of Vietnam: domestic economy, foreign policy and culture, each section has highlighted how Vietnam is on a major trajectory to becoming a new Tiger Economy. Moreover, in the face of a globally interconnected world, Vietnam has managed to firmly establish itself globally, without losing its uniqueness.