Recently, a series of campaigns to crack down on counterfeit and poor-quality goods have been conducted vigorously and relentlessly. In fact, this is not something new. But if you pay close attention, since Donald Trump re-emerged in politics, these 'strong-handed' moves have become clearer and more consistent. Behind the picture of 'for consumer health' is a much deeper strategy: restructuring Vietnam's economic position amidst changing global geopolitical contexts.
1. The 'clean house' leverage to open doors to the US
At first glance, cleaning up the domestic market seems merely to serve consumers. But in reality, this is just the *first move*. The destination is to pave the way for deeper economic cooperation with the US – a country actively re-establishing supply chains to avoid dependence on China.
Since the previous term, Trump has repeatedly mentioned the issue of 'trade surplus' with Vietnam and warned about China's exploitation of Vietnam to evade taxes. Therefore, if Vietnam wants to assert itself as a 'truly serious' partner with the US, the prerequisite is transparency – cleanliness – and control.
Or simply put: if you want to invite esteemed guests, your house must be clean.
2. Cutting the 'cheap bloodline' from China
Most counterfeit and poor-quality products in Vietnam are linked to origins from China – from raw materials, factories, to even counterfeit brands. The most recent incident involved 'Kera' candy or 'Lòng se điếu' products.
The removal of these items is both to reduce dependence on China and to send a message to Western investors – especially the US – that: Vietnam is not a place to 'evade laws' or 'pose as Made in Vietnam'.
3. Restructuring to attract new investment
Vietnam is moving towards diversifying investment sources to avoid falling into the 'dependency trap' – similar to financial investment, it is a matter of 'portfolio risk management'.
However, for significant capital from the US and the West to flow in, the domestic business environment must be transparent, maintain good quality control, and not be manipulated by counterfeit goods. This is the deeper reason behind recent moves.
4. Short-term sacrifices for long-term benefits
However, nothing is free.
When counterfeit goods are eliminated, genuine – higher quality – products will come at a higher cost. This will create an initial shock to the Vietnamese habit of cheap consumption, especially in the early stages of transformation (expected to be around 3 years).
Moreover, when Vietnam 'cuts' the cheap sources from China, a reaction from China is unavoidable. The risks of border closures and difficulties in agricultural exports are very real – my family grows dragon fruit, so we feel this the most: just a tightening of the border by China makes the entire agricultural region feel 'suffocated'.
But looking further, the gaps left by cheap goods will be filled with new capital flows from the West – where there is large capital, high standards, and long-term cooperation expectations.
Conclusion: A painful but necessary transition
Vietnam is on a challenging path: cleaning up internally to gain a new position in the global value chain. The leaders are choosing the difficult path – short-term cuts to aim for a more stable and independent future.
During these 5 transformative years, we – the consumers, small businesses, farmers… – will be the first to face the challenges. But if we go all the way, the reward could be the complete rebirth of the Vietnamese economy, no longer dependent on any 'giant'.
Thank you for reading this far. I hope this article gives you a broader perspective on what is happening – and will happen.