Vietnam faces more economic challenges

Thanh expressed concerns about economic growth this year, saying that due to the global and local economic situation, he could only see more challenges ahead.

He said it was understandable that Vietnam couldn't meet its economic growth target because of the effect of various developments, such as the devaluation of the Chinese yuan, even though this issue has been gradually dealt with.

Globalization had exposed the weakness of many local firms and low-quality products meanwhile the administrative restructuring process is being carried out slowly.

In addition, bad weather and the Formosa Ha Tinh environmental disaster had caused huge economic damage. 

Droughts in the central region, floods in the north central coast and saltwater intrusion in the Mekong Delta negatively affected productivity and hindered poverty reduction efforts. 

Millions of people were also affected by the mass fish deaths caused by the Formosa pollution disaster in five central provinces.

Thanh claimed Vietnam was too dependent on FDI firms. 60% of export value was from 100%-foreign-invested firms, with Samsung alone accounting for 20% of this total. 

Thanh went on to say that it's dangerous because then Vietnam might have to depend solely on Samsung but technology was ever changing.

"We only have a few good support industry firms. If we don't invest in higher value-added parts of the economy, we'll forever lag behind," he said.

Vietnam benefited from more foreign investment last year thanks to increased free trade agreements.

However, Vietnam would continue to face issues with the level of public debt, bad debts and exchange rate risks.

"We need better mechanisms to handle shocks that may come from the US under Donald Trump's presidency. The currency war between US and China will cause headaches for Vietnam and the world," he said.

He emphasized that China is expanding its influence in the east, investing a huge amount of money into the infrastructure in Cambodia, Thailand and Laos.

Thanh said China's policy was to promote bilateral co-operation with each country to create easier access for its commodities and this was both a challenge and an opportunity for Vietnam.