BUSINESS / INVESTMENT

Can Vietnam Become the 'Second China'? The Race Toward an Asian Hub and Three Gateways

Vietnam surpassed $500 billion in GDP (approx. $514 billion) in 2025 with an 8% growth rate, entering upper-middle-income status with a per capita GDP of $5,026, and maintained momentum with 7.83% growth in the first quarter of 2026. While 2026 growth forecasts range from 6.3% (World Bank) to 7.6% (AMRO), the Vietnamese government has set an aggressive target of 10%, making the gap between ambition and reality a key watchpoint for the second half of the year. Korean investments—such as Samsung Electro-Mechanics' 1.8 trillion won FC-BGA investment, LG Innotek's Hai Phong expansion, and 74 MOUs signed at the April Korea-Vietnam Business Forum, totaling approximately $90 billion cumulatively—are elevating Vietnam from a 'low-wage assembly plant' to an 'AI substrate and R&D hub.' The U.S. 20% reciprocal tariff actually highlights Vietnam's price competitiveness compared to China (55%), but a 40% transshipment tariff pressures the simple assembly model, making the enhancement of local content a core task for Korean companies. Although the effective date of FTSE Emerging Market inclusion on September 21, 2026, opens capital market opportunities, the conclusion remains that Vietnam can only become an independent Asian hub—rather than a second China—if it clears three gateways: power infrastructure, competition with India, and policy consistency.