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

These remarks were made Dr. Ho Quoc Tuan, a senior lecturer at Bristol University in the UK, during a recent media interview regarding the impact of the US election results on the European economy and emerging markets, including Vietnam.

According to Dr. Tuan, President-elect Trump’s win saw the US financial market increase 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 have begun 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 which is keen to diversify its supply chain and to capitalise on other markets to avoid the impact of direct tariffs on Chinese goods, which could be up to 60% as President-elect Trump has declared.

Dr. Tuan believes that this represents an advantage for Vietnam as it is a notable destination for businesses looking to move out of China.

Emerging markets, including the nation, 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, Dr. Tuan added.

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

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

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