Friendshoring and the curious case of Vietnam

​Vietnam's Prime Minister Pham Minh Chinh meets with Singapore's Prime Minister Lee Hsien Loong at the Istana in Singapore February 9, 2023.
Vietnam's Prime Minister Pham Minh Chinh meets with Singapore's Prime Minister Lee Hsien Loong at the Istana in Singapore February 9, 2023.
REUTERS/Edgar Su

Post-Davos, another of the big trends we will be watching this year is the expansion of the “friendshoring” phenomenon that has seen a significant rise in the political proximity of trade (and a shift away from geopolitical rivals).

Trade between the US and China is still rising in absolute terms, but Beijing’s share of exports to the US has fallen 7.2% since 2017. Other countries like Mexico and Canada are hoping to pick up some scraps, based on trade agreements and being nestled next to the US border. Canadian Deputy Prime Minister Chrystia Freeland was in Davos making a pitch for new investment, based on Canada’s critical mineral resources and clean energy supply (not to mention, $88 billion in investment subsidies to compete with the US Inflation Reduction Act).

There are signs that such blunt industrial policy is working. An MIT clean investment monitor for Q3 2023 suggested that there was a 42% year-on-year increase to $64 billion in US investment in clean technology – from manufacturing (mainly the EV supply chain) to retail purchases. The billions available to businesses and consumers through the IRA is likely to have played a big role in ensuring that money did not go overseas.

But there is one beneficiary of the friendshoring phenomenon that is not relying solely on its checkbook: Vietnam. The Southeast Asian country is curious in many ways, not least because it remains a Marxist-Leninist one-party socialist republic.

Prime Minister Pham Minh Chinh was in Davos to explain how he squares his country’s socialist principles with hard-bitten capitalist competition for investment. He said the goal is to develop a “socialist-oriented market economy” based on supply and demand, but where the state is present to accommodate “unpredictable” events like COVID. Vietnam is seeking to become a modern, developed, high-income country by 2050, he said, and it has come a long way already since the late 1980s. GDP growth was 4.7% last year and is forecast to be 5.8% in 2024.

Vietnam has managed to juggle relations with the US, its former enemy, and China, which lays claim to parts of the South China Sea currently controlled by Hanoi.

China remains its biggest trading partner, and two-thirds of its manufacturing inputs are reliant on imports from Beijing.

But Vietnam has seen its foreign direct investment soar, as it has positioned itself as an option for Western businesses looking to hedge away from China. Typically, manufacturing wages are around half that paid in China. Pham said his priorities now are to raise education standards to foster advanced manufacturing in semiconductors, AI, and green technology.

He said the chairman and CEO of US tech giant, Nvidia Corporation (Jen-Hsun Huang), visited Vietnam recently and said he plans to make it his company’s second home.

“We always stand ready to facilitate investment,” said the ostensibly communist leader.

Lenin will be whirling in his mausoleum.

More from GZERO Media

- YouTube

Fifty years after the fall of Saigon (or its liberation, depending on whom you ask), Vietnam has transformed from a war-torn battleground to one of Asia’s fastest-growing economies—and now finds itself caught between two superpowers. Ian Bremmer breaks down how Vietnam went from devastation in the wake of the Vietnam War to becoming a regional economic powerhouse.

Eurasia Group and GZERO Media are seeking a highly creative, detail-oriented Graphic and Animation Designer who lives and breathes news, international affairs, and policy. The ideal candidate has demonstrated experience using visual storytelling—including data visualizations and short-form animations—to make complex geopolitical topics accessible, social-friendly, and engaging across platforms. You will join a dynamic team of researchers, editors, video producers, and writers to elevate our storytelling and thought leadership through innovative multimedia content.

The body of Pope Francis in the coffin exposed in St. Peter's Basilica in Vatican City on April 24, 2025. The funeral will be celebrated on Saturday in St. Peter's Square.
Pasquale Gargano/KONTROLAB/ipa-agency.net/IPA/Sipa USA

While the Catholic world prepares for the funeral of Pope Francis on Saturday – the service begins at 10 a.m. local time, 4 a.m. ET – certain high-profile attendees may also have other things on their mind. Several world leaders will be on hand to pay their respects to the pontiff, but they could also find themselves involved in bilateral talks.

A Ukrainian rescue worker sits atop the rubble of a destroyed residential building during rescue operations, following a Russian missile strike on a residential apartment building block in Kyiv, Ukraine, on April 24, 2025.
Photo by Justin Yau/ Sipa USA
Members of the M23 rebel group stand guard at the opening ceremony of Caisse Generale d'epargne du Congo (CADECO) which will serve as the bank for the city of Goma where all banks have closed since the city was taken by the M23 rebels, in Goma, North Kivu province in the East of the Democratic Republic of Congo, April 7, 2025.
REUTERS/Arlette Bashizi

The Democratic Republic of the Congo and an alliance of militias led by the notorious M23 rebels announced a ceasefire on Thursday after talks in Qatar and, after three years of violence, said they would work toward a permanent truce.

Students shout slogans and burn an effigy to protest the Pahalgam terror attack in Guwahati, Assam, India, on April 24, 2025. On April 22, a devastating terrorist attack occurs in Pahalgam, Jammu and Kashmir, resulting in the deaths of at least 28 tourists.
Photo by David Talukdar/NurPhoto

Prime Minister Narendra Modi has blamed Pakistan for Tuesday’s deadly terrorist attack in Kashmir, and he’s takenaggressive action against its government.

- YouTube

“When things are going fine, nobody really tests the skills and talents of their financial advisor, but this is a moment where really good advice can be extraordinarily powerful,” says Margaret Franklin, CFA Institute's CEO and President. In conversation with GZERO’s Tony Maciulis, Franklin describes the current financial climate as “maximum uncertainty,” rating it a 10 out of 10 on the risk scale.

President Donald Trump at a bilateral meeting with China's President Xi Jinping during the G20 leaders summit in Osaka, Japan, on June 29, 2019.
REUTERS/Kevin Lamarque/File Photo

On Wednesday, Donald Trump said he would deliver a “fair deal” with China and that he’d be “very nice” to the country after meeting with major retailers. But Beijing denies that there are any ongoing talks and has told the US it must cancel its unilateral tariffs before China will broker any negotiations.