Viet Nam’s age of ascension: reform and the race for growth
Amid global economic uncertainties, a complex web of diplomatic ties and a projected end to Viet Nam’s demographic dividend, the country is carrying out its most ambitious domestic reforms in decades. Former New Zealand Ambassador to Viet Nam Haike Manning, who is now based in Ho Chi Minh City, explains the reforms underway and what they could mean for New Zealand’s relationship with the Southeast Asian nation.
Author Haike Manning is based in Viet Nam's largest city and economic powerhouse, Ho Chi Minh City
Living in Viet Nam is like living in fast-forward mode: this is a country on the move.
This year, Viet Nam’s per capita GDP will cross US$5,000 (approximately NZ$8,000) for the first time – an astonishing feat given that it was just US$500 in 2000.
Viet Nam has also celebrated many important anniversaries in 2025, including 80 years since Viet Nam’s declaration of independence and 50 years since the end of the Viet Nam War. These anniversaries have been marked with huge public events and military parades across Viet Nam, underpinned by a strong narrative of growing national confidence and sense of destiny.
Viet Nam’s top leader, General Secretary To Lam, talks of an “age of ascension” – a pivot point in Viet Nam’s history where the country shifts from rebuilding and reconciliation to taking its rightful place at the global table. In promoting this vision, the ruling Communist Party also emphasises that Viet Nam’s prosperity and security rest on national unity, state discipline and strategic autonomy in a turbulent world.
Viet Nam’s top leader, General Secretary To Lam, talks of an “age of ascension"
The reform imperative
Viet Nam’s leadership recognises that Viet Nam cannot rest on its recent successes as a major manufacturing hub and export powerhouse and needs to accelerate economic growth to meet its aspirations of becoming a fully developed economy by 2045.
The government is betting that Viet Nam’s economic prosperity will be underpinned by new technologies, such as AI, cloud computing, big data infrastructure, robotics, as well as semi–conductor manufacturing and the digital economy, rather than its traditional strengths in agriculture and manfucturing.
AI in particular is framed not only as a commercial opportunity but as a strategic technology that will shape economic competitiveness, national security and even cultural identity. National strategies to 2030 commit Viet Nam to building an AI talent base, attracting global investment, upgrading digital infrastructure, and embedding AI in manufacturing, logistics, healthcare and government services.
The engine needs to go faster if Viet Nam is to avoid the middle-income trap – and the window is narrowing, thanks to global economic uncertainties and an ageing population expected to see the country’s current demographic dividend come to an end around 2040.
Perhaps uniquely, this enables Viet Nam’s leaders to be welcomed not just in Washington and Brussels, but also in Moscow and Pyongyang.
Haike Manning
The emphasis on “going for growth” is in turn driving the biggest set of domestic political reforms in Viet Nam in 40 years. Since becoming Viet Nam’s top leader in August 2024, To Lam has overseen a “streamlining revolution” to consolidate and merge ministries; remove an entire layer of government (the district level) – resulting in an estimated 150,000 job cuts – and reduce the number of provinces from 63 to 34, including merging Ho Chi Minh City with the surrounding provinces Binh Duong and Vung Tau.[AS1] Infrastructure is being turbocharged, with large scale mobilisation of public and private funding.
In contrast, the “blazing furnace” anti-corruption drive overseen by the previous general secretary, which in previous years engulfed a number of high profile businesspeople as well as officials, now receives less attention.
Bamboo diplomacy 2.0
So what does this reform mean for Viet Nam’s foreign policy?
Viet Nam’s foreign policy approach, often called “bamboo diplomacy”, is likely to remain a central feature. Viet Nam takes a “friends with all” approach to its foreign relations, while fiercely maintaining its strategic autonomy. Hanoi will continue to maintain strong partnerships (but not formal alignments) with the United States, China, Russia, India and Europe, bending, but not breaking, as great-power competition intensifies.
Perhaps uniquely, this enables Viet Nam’s leaders to be welcomed not just in Washington and Brussels, but also in Moscow and Pyongyang. But it also means that Viet Nam’s position on conflicts such as Ukraine are more nuanced and complex.
Alongside the traditional foreign policy agenda of security and defence, Viet Nam is likely to increase its focus on promoting its economic and trade interests to support the national growth effort.
Manning: "Perhaps uniquely, this enables Viet Nam’s leaders to be welcomed not just in Washington and Brussels, but also in Moscow and Pyongyang."
Viet Nam is already a leader in its network of free trade agreements (FTAs), second only to Singapore in Southeast Asia. Beyond traditional FTAs, in future Viet Nam’s diplomats and trade negotiators are likely to become active in working to secure access to supply chains, protect and enhance digital trade, and promote and support two-way investment flows, particularly those that lead to the transfer of strategic technologies such as AI and semi-conductors.
A second potential shift in Viet Nam’s diplomacy is a greater emphasis on promoting national champions. This includes state-owned enterprises (SOEs) such as telecommunications giant Viettel, as well as private conglomerates such as Vingroup (specialising in EVs and new technologies), VietJet (aviation) and FPT (IT and communications). These champions are expected to drive the outward expansion of Vietnamese capital, and inward flows of essential technologies.
What does this mean for New Zealand?
New Zealand enjoys a strong diplomatic relationship with Viet Nam, via a new Comprehensive Strategic Partnership agreed in 2025. The relationship is founded on the key pillars of trade, education and regional security and defence ties.
Looking to the future, however, New Zealand should consider how it responds as Viet Nam ramps up its economic and trade diplomacy. This could include joining forces to shape next generation trade and economic agreements to support the digital economy or better protect supply chains. It could also involve real economic cooperation in new technologies, including AI, cybersecurity and big data.
Education links could become strategic, not just commercial, as both sides seek to develop digital talent.
What’s next?
Viet Nam’s next major political event, the 14th Party Congress, will take place in January 2026. To Lam is expected to be confirmed for another five years in the top job, stewarding Viet Nam during this “age of ascension”.
In this scenario, expect continuity in the going for growth agenda and ongoing domestic reform, underpinned by strong international promotion of Viet Nam’s economic interests by its diplomats, leaders and emerging national champions.
Viet Nam is not slowing down anytime soon.
About the author
Haike Manning is the former New Zealand Ambassador to Viet Nam (2012 to 2016). His 20-year career as a New Zealand diplomat spanned key global economies (India, Brazil, China, as well as Viet Nam), with a strong focus on supporting trade, business and education outcomes for New Zealand. Since 2017, Haike has been based in Ho Chi Minh City, where he founded LightPath Consulting Group, a consulting business supporting international education providers to engage effectively in Viet Nam.
Haike is the author of Viet Nam & New Zealand: The next chapter, published by the Asia New Zealand Foundation in February 2025.
The Foundation's Asia in Focus initiative publishes expert insights and analysis on issues across Asia, as well as New Zealand’s evolving relationship with the region.
