• News
• 2024-09-27

Vietnam's Economic Miracle at Risk as 1200 Trillion VND Exits

There is no such thing as a free lunch, and American lunches are the most poisonous of all. While everyone is focused on the Gaza issue, the United States has already raised its harvesting sickle high, and the first stop for America's harvest is not Japan, nor Europe, but Vietnam. As the end of the U.S. interest rate hikes approaches, the sickle of the dollar harvest is finally about to fall, and in the future, 15 countries may face problems. Can China avoid this harvest? How should our country respond?

Is Vietnam the first stop for American harvest?

Being an adversary of the United States is dangerous, but being an ally of the United States is deadly. After all, in the eyes of the United States, allies are life-saving in critical moments, and at this critical moment of American harvest, allies will once again become sacrifices for the United States.

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We know that this year, the United States has been continuously raising interest rates, even at the risk of its own domestic bank bankruptcies. The purpose of all this is not to showcase the greatness of the United States, but to make the dollar sickle sharp enough.

And now, the sickle of the United States is finally about to slowly fall.

We know that as our neighbor, Vietnam has been taking over the low-end industries transferred from China, and in recent years, more and more voices have been saying that Vietnam will replace China to become the next world factory.

But is this really the case?

In recent years, the U.S.-China trade war has led to the transfer of many low-end industries to Vietnam. It can be said that Vietnam has benefited from the U.S.-China confrontation, but this benefit is not easy to enjoy.

Now, Vietnam's number one trade export country is the United States. However, due to U.S. interest rate hikes, Vietnam's trade volume is also declining significantly, especially exports to the United States, which have fallen by nearly 19% compared to last year.Besides trade, the amount of international capital investment in Vietnam is also significantly decreasing. Since the beginning of this year, the total international capital investment in Vietnam has plummeted by approximately 39.9%. Additionally, the inflow of foreign direct investment has fallen by 15%, indicating that Vietnam is no longer experiencing rapid growth but is instead rapidly declining.

Apart from the reduction in investment and trade, Vietnam's PMI index for September stood at 49.7, which means that the country's manufacturing sector is also undergoing a significant contraction.

While trade and investment are shrinking, the more dangerous aspect is Vietnam's debt. We all know that the development of the manufacturing industry is a process of capital intensification, hence Vietnam has accumulated a substantial amount of debt. As of September this year, Vietnam's total debt was around $196.7 billion, while its foreign exchange reserves were only $101.4 billion.

Moreover, we are aware that Vietnam's largest exporter is Samsung, which accounts for nearly one-third of Vietnam's market share. This means that the lifeline of Vietnam is in the hands of foreign capital; if foreign capital withdraws, Vietnam's foreign exchange will be directly depleted.

According to reports from Vietnam Express, since the U.S. interest rate hikes, foreign capital has sold off nearly 1.2 quadrillion Vietnamese dong worth of assets, a scale that is five times that before the U.S. interest rate hikes.

Furthermore, the real estate crisis in Vietnam is looming. Does everyone remember the Vietnamese real estate tycoon Trinh Van Lan? This is a sign of the real estate crisis in Vietnam. Coupled with the fact that Vietnam can only raise interest rates to counter the U.S. interest rate hikes, it can be said that Vietnam is making a last stand.

In the past few days, Vietnam's stock market has plummeted by 4.2%, indicating that the country is currently facing a dire situation. Therefore, we see the Vietnamese authorities actively seeking investments and looking for overseas investments.

However, can this really block the dollar's harvest?

Has the United States' harvest begun?Regardless of whether we consider the economic cycle or the strength of the U.S. economy, the current tide of the U.S. dollar has entered the harvest phase. In addition to Vietnam being the most dangerous, there are more than ten other countries at risk, including Poland, the Czech Republic, Pakistan, Egypt, and others. These countries share a common characteristic: their foreign exchange reserves and external debt are inverted.

Thus, the crisis has arrived, and we should be prepared.

How should our country respond?

In today's globalized world, we cannot avoid the ebb and flow of the U.S. dollar, so what we can do is to minimize our losses as much as possible. In 2008, since our country was mainly focused on imports and exports, we adopted the strategy of "saving the U.S. is saving China." It can be said that we single-handedly pulled the global economy back.

However, the current U.S. debt has reached approximately $33.7 trillion, which is no longer a burden that a single country can bear. Moreover, we should also strive for the happiness of our own people.

Therefore, the first thing we must do is to build high walls and accumulate ample grain. Hence, our strategy in recent years has been to expand trade imports, mainly focusing on energy and food. Some Western countries even criticize us for buying half of the world's food, causing global food prices to rise.

In addition to stockpiling resources, we have been selling U.S. debt and purchasing a large amount of gold. Since last year, our central bank has been buying gold for about ten consecutive months, and the private sector has also been consuming a significant amount of gold. It can be said that everyone is preparing for the future.In addition to this, there is a strong emphasis on developing a rural encirclement strategy for cities. This involves expanding trade with third-world countries and reducing dependence on trade with Western countries. By doing so, it is possible to avoid the strong interference of the dollar tide.

At the same time, increasing cooperation with third-world countries can also expand the development space for the renminbi. The scarcity of the dollar caused by the United States' interest rate hikes can instead provide more opportunities for the renminbi.

Therefore, what we need to do at this time is, on the one hand, to stabilize our own economy, and on the other hand, to boldly go out and fill the gap left by the dollar by strengthening trade and financial cooperation with third-world countries.

In this regard, Argentina's use of the renminbi to repay loans is a model. In the future, more developing countries can replace dollar debt with renminbi debt, thereby not only avoiding dollar harvesting but also strengthening cooperation with China.

It can be said that the dollar tide is very dangerous, but the opportunities are also great. I hope that in this process of the United States raising interest rates, we can seize the opportunity to expand a larger development space.