Opportunities for Vietnam to lure more capital flows following Donald Trump’s election

The remark was made Dr. Ho Quoc Tuan, senior lecturer at Bristol University (UK) in a recent media interview regarding the impact of the US election results on the European economy and emerging markets, including Vietnam.

According to Dr. Ho Quoc Tuan, after Trump won the election, the US financial market increased while emerging markets all decreased, including markets that were considered quite optimistic in the eyes of investors such as India and Indonesia. This indicates that capital flows began to withdraw from some emerging markets and move back to the US.

However, Dr. Tuan believes that the US capital flow withdrawing from some markets can be replaced by capital flow from China, a country that wants to diversify its supply chain and capitalize on other markets to avoid the impact of direct tariffs on Chinese goods, which could be up to 60% as Trump has declared.

Dr. Tuan believes that this is an advantage for Vietnam, a notable destination for businesses wishing to move out of China.

Emerging markets, including Vietnam, also have the opportunity to attract international capital flows for green projects, citing China's commitment to a US$25 billion fund to support emerging markets in transitioning to a green economy, Tuan added.

Not only China, but Europe, Japan and the Republic of Korea (RoK) will also invest in this field.

This would provide emerging markets with alternative sources of capital in case the US withdraws from some environmental agreements, as Trump believes that multilateral agreements, including some on the environment, are damaging the US economy and businesses.

However, Tuan said that Vietnam needs to prepare to compete with other emerging markets in attracting international investors, but noted that competition itself will be the catalyst to promote Vietnam’s reforms.