Value chain risk: Will Vietnam end up like another Chinese province?

livemint.com:

Vietnam’s anti-corruption drive, which the ruling Communist Party chief Nguyen Phu Trong likened to a “blazing furnace," is running hot. This year alone, two of the four pillars of power, including the chairman of the parliament and the country’s president, left their posts amid graft allegations. Last month, Truong My Lan, a real estate tycoon and Vietnam’s richest woman, was sentenced to death for her role in a $12 billion fraud case that involved Saigon Commercial Bank, one of its largest lenders.

Eighty-five others were sentenced on charges ranging from bribery to abuse of power. There are now concerns among investors that Vietnam, perfectly positioned to gain from the US-China rivalry, is not all that politically stable. With Hanoi’s power vacuum getting bigger, it’s unclear who will have the top job.

Trong, at the age of 80, is widely expected to step down at the next Party Congress in January 2026. What’s clear, however, is that this anti-graft campaign is moving prosperity closer to the Chinese border, while leaving Ho Chi Minh City, until recently the country’s commercial centre, in the dust. At this rate, only northern Vietnam may live up to its full potential—at the expense of the south.

As global manufacturers diversify their supply chains, money has been going to the northern region around the capital city of Hanoi and the eastern port of Haiphong. Quang Ninh, the northeast coastal province where the tourist hotspot of Halong Bay is located, was the largest recipient of foreign direct investments last year. Swedish auto-safety systems maker Autoliv is planning a $160 million factory there, as is Taiwan-headquartered auto supplier Boltun, just to name a few.