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Positive Impacts of Globalization on Vietnam

Globalization has positively impacted Vietnamese firms since the country joined the WTO in 2007 by facilitating trade liberalization and reducing barriers, allowing companies to expand their markets significantly. It has also attracted foreign direct investment, enabling local firms to partner with multinationals and gain access to capital and technical expertise. Additionally, participation in global supply chains has enhanced manufacturing capabilities and competitiveness, leading to improved business regulations and a more predictable operating environment.

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17 views2 pages

Positive Impacts of Globalization on Vietnam

Globalization has positively impacted Vietnamese firms since the country joined the WTO in 2007 by facilitating trade liberalization and reducing barriers, allowing companies to expand their markets significantly. It has also attracted foreign direct investment, enabling local firms to partner with multinationals and gain access to capital and technical expertise. Additionally, participation in global supply chains has enhanced manufacturing capabilities and competitiveness, leading to improved business regulations and a more predictable operating environment.

Uploaded by

mylovedao54
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© © All Rights Reserved
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Name: Nguyễn Phạm Hồng Tâm

Student ID: 31231026938

Students answer the following question with no more than 1000 words.

1. Analyze the positive effects of globalization on Vietnamese firms, especially since


Vietnam joined the WTO?

At first, to simplify the term “Globalization”, it is a concept indicating a phenomenon or


tendency that many countries all over the world form relationships, regardless of economics,
politics, law, or culture. Therefore, particularly in the aspect of economics, it aids corporates
to take advantage of the opportunities to expand their fund, scale, and market, and also reduce
operation costs.

Accompanying with joining the World Trade Organization (WTO) in 2007, globalization has
had a significant positive influence on Vietnamese firms. For that reason, Vietnam has
thrived strongly in recent decades thanks to the basics of the WTO. The following
paragraphs will analyze some merits of this phenomenon.

First and foremost, with the advantage of trade liberalization while receiving Most-Favored-
Nation treatment from other members, this provided preferential tariff treatment, and reduced
trade barriers, allowing firms to export easily to over 160 member countries, especially some
specific sectors such as textile, footwear, and electronics that have benefitted. Now they can
sell their products in a broader market, expanding their customer base. For example, a
company like Vinamilk has successfully expanded their international presence to more than
30 countries, while FPT Corporation grew their global IT services business.

Secondly, globalization has attracted a considerable amount of foreign direct investment in


Vietnam, leading to increased FDI inflows. International firms are looking to tap into
Vietnam’s growing economy and youthful workforce; hence, our local companies could have
opportunities to partner with multinational companies, and join modern management
practices. This investment would also bring in capital and gain technical expertise, which
helps local firms improve their operations and competitiveness.

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Thirdly, integration into global markets along with the establishment of many joint ventures
has exposed Vietnamese companies to international best practices and facilitated the transfer
of advanced technologies. This movement forced most companies upgrade their production
process, enhance efficiency, and produce higher-standard goods to meet strict requirements.
Importantly, it’s a very valuable chance for a developing country like Vietnam to grasp and
control core technology. Recently, US chip giant Nvidia signed a cooperation agreement and
acquired VinBrain, a subsidiary of conglomerate VinGroup.

Finally, Vietnamese firms have increasingly participated in worldwide supply chains. This
allowed us to develop sophisticated manufacturing capabilities, engage in larger distribution
networks, and benefit from economies of scale. In addition, globalization could push
Vietnamese entrepreneurs to improve their competitiveness through higher quality standards
and better customer services whilst complying with WTO requirements, leading to better
business regulations, intellectual property protection, and market mechanisms, creating a
fair/predictable operating environment for Vietnamese firms.

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