Does Vietnam lose opportunity in the ‘China+1’ strategy due to political instability?
Edmund Malesky, director of the Duke Center for International Development and professor of political economy, is quoted in a BBC News article examining if political leadership changes in Vietnam will affect the country’s attractiveness to foreign investors.
The Aug. 8 article, “Does Vietnam lose opportunity in the ‘China + 1 strategy due to political instability,” explains Vietnam has benefitted from the “China + 1” policy, a supply chain strategy implemented that encourages multinational companies to diversify their supply chain and manufacturing activities away from China to mitigate risk.
Considering the fluctuations in the Vietnamese political scene, Malesky told the BBC he thinks “investors will wait for the 2026 Party Congress, and at the same time try to gather information on Vietnam’s policy orientations through socio-economic plans.”
The article referenced the Vietnam Provincial Competitiveness Index (PCI), which reported a decline in foreign investors expressing a desire to expand their investment in Vietnam.
Malesky, who serves as the PCI’s primary author and lead researcher, shared two top reasons for the decline.
“The first is that although investors have long complained about corruption in Vietnam and are satisfied that the leadership is solving this problem, the anti-corruption campaign has led to delays in resolving the procedures of bureaucracy, especially related to public spending and licensing investment.
“‘Investors and sanctions have overtaken the work of building regulations and procedures to reduce bribery, so many local managers still find that the regulation is not clear or that they are not yet confident enough to ensure that they comply with the law, so they respond by delaying important decisions,’ Malesky said.
“According to him, this discourages investors who are waiting for licenses or waiting for important government payment of public service.
“Second, Dr. Malesky said that there is little information about candidates being considered for leadership positions in Vietnam.
“Among them, he commented that many have never been in positions of contact with the public (previously only doing internal work) or interacting with investors and very few people have a business and business and economic career backgrounds.
“As a reason, therefore, investors are seeking clearer information about who will hold top leadership positions, what their economic policy views will be like, and what will be the structure of the Politburo and the Central Committee.”