Vietnam’s growth accelerates despite anti-China riots

In this June 12, 2011 file photo, Vietnamese protesters carry a banner with a Vietnamese slogan reading, “China must respect and execute the Declaration on the Conduct of Parties in the South China Sea,” during a protest demanding China to stay out of their waters following China’s increased activities around the Spratly Islands and other disputed areas, in Hanoi, Vietnam. Vietnam’s economy grew at its fastest rate for three years in the first nine months of 2014, government figures showed Monday, despite deadly anti-China riots that targeted factories and threatened to dent foreign investment. AP

HANOI–Vietnam’s economy grew at its fastest rate for three years in the first nine months of 2014, government figures showed Monday, despite deadly anti-China riots that targeted factories and threatened to dent foreign investment.

Gross Domestic Product (GDP) grew at 5.62 percent between January and September this year, up from 5.14 percent in the first three quarters of 2013 and 4.73 percent over the same period in 2012.

While noting the figures marked a “positive change” Prime Minister Nguyen Tan Dung called for further measures to boost the country’s economy in a statement on the government’s website.

“We have to concentrate on effectively dealing with shortcomings, weaknesses and difficulties that are hindering production, business and growth,” Dung said.

The government has targeted full-year growth of 5.8 percent.

In May anti-China riots rattled parts of the nation after Beijing moved a deep-water oil drilling rig into waters in the South China Sea claimed by Hanoi.

Some foreign-backed factories were set on fire, alarming investors who had previously been attracted to the communist country for its reputation for stability and security.

Immediately after the unrest, Dung pledged to step up economic reforms and prevent a repeat of the riots, promising assistance to affected businesses.

China withdrew the rig mid-July, a month earlier than initially expected, claiming it had successfully completed the drilling mission.

Fallout contained

Although Chinese tourist arrivals have fallen dramatically since Beijing imposed a travel ban, the wider economic fallout from the riots appears to have been contained.

For years, Vietnam has struggled with sluggish growth due to structural problems including toxic loans paralyzing the banking sector and inefficient state-owned companies, which still dominate the economy.

Last year, Vietnam’s economy grew 5.42 percent, picking up speed slightly after its worst performance in more than a decade the previous year.

According to state media, the Vietnamese government has revised its GDP growth target to 6.2 percent for next year, higher than the earlier target of 6.0 percent.