Located in Southeastern Asia, bordering Cambodia, China, and Laos, the Socialist Republic of Vietnam was conquered by France during the 19th century. Vietnam declared their independence after World War II, but France continued to rule until 1954, when it was defeated by communists. As a result, the country was divided into two rival states - North Vietnam and South Vietnam. Conflicts between the two have emerged and resulted in what is known today as the Vietnam War, with the South receiving controversial military and economic aid from the United States. The war ended in 1975, when North Vietnamese forces invaded the South and reunited the country under the communist rule. Today, it’s still a communist state, divided into 58 provinces, with Vietnamese as its official language.
Economically speaking, Vietnam is transitioning since the enactment of the “doi moi” (renovation) policy in 1986, specifically from a centrally planned economy to a more socialist one, aiming towards a more industrial and market-based economy. Once a nation ravaged by war, Vietnam’s economy now flourishes year over year, with an annual growth of more than six percent since 2016. It is expected to continue its strong GDP growth trajectory in the upcoming years as well. In 2015, inflation slumped to an unprecedented 0.63 percent, but it is expected to recover and stabilize at around three percent in the following years.
Transitioning from mainly an agrarian economy to an industrial one, the labor force is changing too, growing within the manufacturing and services sectors. Moreover, the unemployment rate in the country is at 2.27 percent, quite low for a country this densely populated, and also one of the lowest rates in the Asia-Pacific region. The country’s prosperous financial state comes also as a result of Vietnam joining the World Trade Organization in 2007, which made the country an attractive destination for foreign investors. Vietnam’s most important import partner is China, with a third in all imports. The United States dominating the abroad trade with a market share of 23 percent in Vietnam's exports.
