Vietnam’s economy has fared better than that of almost any other country except China during the Covid-19 crisis. It grew by 2.9% last year while most other countries fell into recession.
One consequence of the crisis was that manufacturers realised the importance of diversifying supply chains, and many accelerated the China Plus One policies that they had initiated because of the US-China trade war. This led to a surge of investment in Vietnam from global manufacturers last year.
Economic activity was also supported by higher demand for certain consumer products as people around the world spent more time at home during lockdowns. Vietnam’s exports of home furniture and accessories rose dramatically, as did exports of phones, computers and electronics.
While this was good news for the country’s balance of payments, the increased activity put pressure on its supply…
