War-torn to economic miracle: How Vietnam has emerged as a China-plus-one beneficiary

Subscribe to enjoy similar stories.For anyone scrolling through social media lately, Vietnam seems to have taken over the feed, with its cafés, coastlines and bustling streets firmly etched onto the global travel map. But the tourism buzz is only the surface of a deeper story.Emerging from the ashes of the war with the US and from being one of the world’s poorest economies in the 1980s, Vietnam is now seen as an economic miracle, delivering sustained high growth (8% in 2025) and reducing poverty to below 5% from nearly 80% in 1993.

It has also become a key destination under the West’s China-plus-one strategy, offering a compelling cost-productivity mix.For India, long contending to be China’s alternative, the task is to match Vietnam’s integration into global supply chains before it can position itself as a credible substitute.Vietnam’s economic transformation began with the Doi Moi reforms in 1986, when it introduced a series of measures to shift from a centrally planned system to a “socialist-oriented market economy”. Unlike several economies that undertook similar reforms in the 1980s and 1990s, Vietnam aligned global liberalization with sweeping internal reforms.A broad push to improve the business climate, including deregulation, export incentives, special economic zones, and openness to foreign investment, turned trade into the backbone of growth.

Export-oriented manufacturing zones, streamlined customs procedures, and competitive labour policies helped firms plug quickly into global supply chains.The country has also entered into numerous bilateral and multilateral trade agreements since joining the World Trade Organization (WTO) in 2007. Today, it is part of 18 Free Trade Agreements (FTAs) spanning partners such