Vietnam Shifts FDI Strategy to Boost Domestic Capacity

Nearly 40 years after opening its economy to tap international resources for national development, Vietnam is shifting its focus from simply attracting more foreign investment to using it more effectively to strengthen domestic capacity, enhance competitiveness and bolster economic self-reliance, the central message of the Politburo’s Resolution No. 10-NQ/TW. This strategic shift signals a new phase in Vietnam's economic development, moving beyond mere capital inflow to a more nuanced approach that prioritizes the quality and impact of foreign investment on the domestic economy. Following four decades of reform and opening-up (Đổi Mới), Vietnam has transformed from an economy facing severe difficulties, food shortages, and the impact of an embargo into a dynamic economy increasingly integrated into the global economy. The Politburo's resolution underscores the Party's commitment to fostering sustainable growth and achieving greater economic independence. The emphasis is now on leveraging FDI to facilitate technology transfer, integrate domestic firms into global value chains, and promote the development of high-value industries. This involves not only attracting investment but also ensuring that such investment contributes to building stronger domestic enterprises and fostering an environment conducive to innovation. Under Vietnam's one-party system, decisions from the Party Central Committee significantly shape economic policy direction. Resolution No. 10-NQ/TW reflects the Party's strong determination to elevate the quality of economic growth and ensure its long-term sustainability. This move is poised to solidify Vietnam's position as a key economic player in the ASEAN region and enhance its influence on the international stage.