i) Discuss the major economic metrics of each country.

The economy had been defined as the condition of the country in terms of the economic activities

like the consumption and production of goods based on the scarcity of resources as well as the

understanding on the supply and demand of money with the financial market (Kopp, 2022). With

the economic bring into picture, it is importance to understand the measurement of the economy

growth and performance based on the major economic metrics defined for the country. The major

economic metrics had been referred to the economic indicator for the country which had been

crucial to become the benchmark measurement for the economic growth (Kopp, 2022). Some of

the examples of the economic metrics will include the Growth Domestic Product (GDP) and

interest rate. For the current research on the major economics metrics, the measurement will focus

on the comparison of the two countries between China and Vietnam.

Figure 1: GDP Growth Between China and Vietnam – 1990 to 2021 (World Bank, 2022a)
The Figure 1 had been showing the GDP growth based on the timeline from 1990 to 2021 which

showed approximately of 30 years of growth timeline. The GDP growth had been signaling the

growth of the economy as the GDP is computed with the combination of consumption, investment,

government spending and net export. The GDP brough the definition on the measures the monetary

value of final goods and services for the provided specific period of time. With both countries,

China and Vietnam being compared closely, the GDP growth of China appear to be higher than

GDP growth of Vietnam where the China’s GDP growth had been consistently above the Vietnam’s

GDP growth indicating that there is strong economic growth in China over Vietnam. This could be

contributed by the reason that China as the developed country is having strong economic condition

with the country having richer resources and advance technology to grow the economy over

Vietnam which is recognized as the developing country (Backer & Miroudot, 2019). Besides, the

observation on the GDP from 2020 onwards had observed the sharp drop for both China and

Vietnam GDPO growth but China’s GDP growth had shown great recovery in 2021 which Vietnam

had failed to record similar positive growth showing the Vietnam posed the weaker economic

activities suggesting the weaker economy recovery in comparison with China.

Figure 2: Interest Rate Between China and Vietnam – 1990 to 2021 (World Bank, 2022b)

The interest rate within the economic concept provides the definition in the measures of the

percentage reward a lender receives for deferring the consumption of resources until a future date.

The interest rate had been relevance to the time value of money where the higher lending rate will

translate to the higher finance cost based on the borrowing and lending rate between the surplus

and lenders (Huld¸2022). With reference to the interest rate in Figure 2, the comparison between

the China and Vietnam had been triggered within the study of the interest rate development for the

past 20 years from the year 2000 to 2021. The trend and pattern for the interest rate had shown that

China had significantly and consistently recording the lower interest rate compared to the interest

rate in Vietnam. This would translate that the cost of financing and borrowing in China is more

favourable compared to Vietnam as the interest rate in Vietnam appear to be higher which result

in burdening the lenders and borrowers to pay higher interest expenses to the fund borrowed or

loan obtained (Hancock, 2022a). With this, the growth opportunity for the country like Vietnam
indeed become difficult as the high interest rate may appear to become the hurdle which potentially

contributed by the lower surplus in cashflow within the country resulting the lower supplier of

surplus or investors towards the higher demander of cash. Unlike China, the lower interest rate for

the country had create the cheaper lending cost which attract more businesses and personal

individual to continue engaging the higher borrowing of fund which will increase the investment

and consumption within the country contributing to the higher economic activities for the growth

in the economy for the country (Hancock, 2022a). However, the similar impact will not be

observed in Vietnam as the high finance cost will make the borrowing more appealing rejecting

the possibility for the business and individuals to engage for higher funding of cashflow into the

economic activities for the country (Puentes, 2015).

ii) Discuss each country's macroeconomic stance.

The China’s macroeconomics had bene proven to be stronger over Vietnam with the demonstration

of the higher GDP growth and the lower interest rate. The China’s economic growth had been

clearly contributed with the larger resources and the process of the globalization inducing the

strong economic condition in China. With China being the major economic hub in Asia, it is no

doubt that the increase in the foreign direct investment (FDI) will continue to create the opportunity

for the economic development to proceed to the positive contribution to the economy. The lower

interest rate had put forward cheaper financing for the foreign investment which will become the

source of attraction for China to attract higher foreign investment into the country (Hancock,

2022b). The high FDI will then in aligned with the GDP growth for China where the significant

growth of GDP will be driven by the higher consumption and investment spending within the local

market. The continuous growth of the economy in China will likely to pose strong position as the
recovery from the Covid-19 in the GDP growth had been the evidence showing the country being

wise in the management of the economic growth (Huld, 2022).

On the other hand, the GDP growth in Vietnam is showing the statistical where the growth rate is

not as significant as the developed country like China. In addition, the high interest rate in Vietnam

will keep burdening the high finance cost that will reduce the foreign direct investment (FDI) to

come into the Vietnam. With the lack of the potential net export growth, Vietnam will not be high

affected with the incoming FDI which will provide better room for the economic development

within the local economy (Pham, 2022). However, the lack of resources and strength of the local

market will put Vietnam into unfavourable situation to achieve higher GDP growth as shown in

comparison with China’s GDP growth. With this, Vietnam will need to focus more in developing

the local infrastructures and economic condition before being able to move into the economy of

developed country which required Vietnam to come in strong with the higher potential to grow

internally to improve the GDP achievement in the country (Nguyen, 2022).

2) Examine the link between an MNE and each economy.

The MNE which represent the multinational enterprise provide the definition on the enterprise

producing goods or delivering services in more than one country. The perspective of the MNE

brough the similar understanding on the establishment of the multinational corporation where the

foreign companies investing in the local economic market to drive the higher potential growth in

the market. The importance of the MNE towards the country’s economic condition can be observed

through the foreign investment of cashflow which will stimulate favourable business growth as

well as higher consumption within the country to motivate the country’s economic growth. As a

result, it is common to see the countries encouraging foreign companies to enter the local market
which will contribute to higher growth for the country’s economy.

First of all, the involvement of the MNE had been significant towards the globalization of the

market which means the existence of the MNE in the country will induce higher expansion of the

market. For instance, China had been high in population which lead to high demand in the local

market. With this, the investment of the MNE in China will help to facilitate the business growth

and meet the consumption in the local GDP which will contribute to the higher growth for the

local’s economy (Hancock, 2022a). The globalization factor will not only benefits in the local

business expansion but also allow the higher export trade that will increase the growth for the

country as the lack of cross border trading may limit the potential of the market in the country

(Caporale, 2022). For instance, China had been engaging in the recent mega project of One Belt

One Road (OBOR) which had become the high stimulant in driving the economic growth for the

country. The OBOR project had been creating diversified opportunity towards foreign investment

to induce higher cashflow to positive impact and influence the growth of the economy. However,

on the other hand, Vietnam had not been so developed compared to China where the opportunity

for the local market to expand is lower compared to China. However, the development of the MNE

will help to drive foreign expertise, talents and advance technology into the country to promote

the growth of the economy. As the developing country, the attraction for external expertise into the

business development in the country for Vietnam had been significantly motivating the

modernization of the economic development for the country (Dapice, 2022). Despite Vietnam not

being attractive location for the major market like China, the attraction for the development of the

MNE will improve the local market which will slowly shifting the developing country status to

developed country status (Caporale, 2022).

Besides that, the MNE had been always recognized as the opportunity to grow the GDP of the
country where the GDP will include the development of the economy based on the measurement

of the consumption, investment, government spending and the net export for the country. The MNE

had been creating the opportunity to induce more production of gods and services in the local

market which will help to improve the consumption spending within the local market wand

improve the growth rate for the economy (Liang¸2022). In addition, the investment from the

foreign companies including the MNCs had been triggering the increase in the investment value

within the GDOP which will also contribute positively towards the GDP growth for the country.

In relevance toward the country like China, the increase of the MNE development certainly put

the China’s economy into more favourable position with China being the major hub in Asia for the

business and corporate market (Dapice, 2022). The high resources and talent in China had put

China as the favorable location for the MNE to start and growth for the benefits of the business

and economy growth for China (Davidson¸2022). The similar positive impact is expected for the

MNE link to the economic growth within the GDP for Vietnam as the higher involvement of the

MNE certainly put up the consumption spending and investment value for the Vietnam’s GDP.

However, the increase of the MNE in Vietnam will backfire putting up further pressure against the

local companies where the lack of economic strength within the local market will put higher

pressure for the local companies to compete with the established companies outside the country.

This will put good GDP growth but at the same time killing the opportunity for the local companies

to develop and grow. This will result in the high dependent on the MNE rather the own local

companies which will put the Vietnam’s economy very hard to move forward with (Nguyen¸2022).

On the other hand, China will not have similar issues with MNE in the local market as China had

been the major hub for the large growing companies where the big names in the China homegrown

companies had been posting strong market positioning and will not be easily threaten with the
increase of the MNE into the country (Caporale, 2022).

Last but not the least, the MNE will provide positive impact to the employment opportunities for

the labour force of the country. In addition, the involvement of the MNE will provide the platform

to have the exposure on the training and share of the expertise and talent with the local companies

and individuals. This had been very crucial for country like Vietnam which had been facing

difficulties in seeking for skill professional workers. With this, the increase of the MNE will not

help in lowering the unemployment rate in Vietnam but also improve the skill and knowledge of

the local labour force’s expertise which will help in growing the skill labour within the local labour

market (Nguyen, 2022). However, things will be different for country like China where the country

will be facing higher competition in the labour force market where the labour force of China had

been highly skilled with good talent and knowledge where the increase of the MNE will not

significantly provide the benefits on the sharing of expertise (Backer & Miroudot, 2019). The

contribution of lowering the unemployment rate with higher job opportunities from the MNE had

been the important reason instead for China to continue to induce higher engagement with MNE

development. The high population in China often observe the surplus of the labour market where

the MNE will become the solution provider for China in creating jobs to decrease the

unemployment concerns in China (Hancock, 2022b).

3) Discuss 2 possible improvements to the infrastructure of each country.

The possible improvement to the infrastructure in the country is crucial in driving the economic

growth for the benefits for the people within the country. At most times, the country had been

actively triggering the use of the monetary policy and fiscal policy as the tool to control the

inflation and trigger the stimulant of the economic growth for the country. However, the
development of the infrastructure in the country will hold the significant key for the country to

develop and transform the economic development for the country where majority of the countries

in the world in seeking for the improvement in the infrastructure to provide the improve platform

for the local country to continue to develop within the local economic growth (Ansar¸2014).

Focusing on China, China had been developed country with many modern infrastructures which

lead to the modernization of the market and economy of the country. This will observe that China

will be seeking for digitalization and transformation in the green management and sustainability

approach for the country. This would be observing the improvement in the development of the

infrastructure to move towards the engagement for the higher sustainability for the country

(Puentes, 2015). With the current China economic condition appear to be strong with rich of

resources, the country of China should focus on the development of the mega project like

renewable energy project that will help the country to use cleaner energy and more sustainable

energy to drive the longevity on the development for the country (Hancock, 2022a). This will also

provide the benefits in achieving higher cost efficiency for the country using the renewable energy

like the hydroelectric, solar power or wind power where the investment in the facilities

infrastructure will help to achieve the green energy that will not involve the burning of the fossil

fuels for the electricity generation (Davidson, 2022).

Besides, China had been very large in the geographical perspective where the country had been

not only high in resources but also high population and coverage area for the whole country. This

had induced the need for China to improve the transportation infrastructure which will significantly

improve the supply chain and logistics management within the country (Liang, 2022). The major

cities will not likely to face logistics challenges within the country but rural areas outside the major

cities may have high concerns in delivering the goods and travelling for working purpose which
will become the stopper which limit the growth of the economy. With this, the focus in the public

transports like the railway and roads had been crucial infrastructures for China to improve the

gameplay for the country to improve the connectivity to facilitate the local market expansion for

the business and individuals (He, 2022). This will help to shorten the travelling time between the

places in the large country which will help the distribution of the goods and services which is

crucial for the GDP growth of the country.

On the other hand, Vietnam had been recognized as the developing country where the existing

infrastructure in the countries certainly is lacking modernization and advancement technology due

to the lack of the resources within the country. With this the demand for the infrastructure

improvement certainly had been viewed in the different perspective as the similar mega projects

for China may not appear to be ideal for the current situation of Vietnam (Dapice, 2022). The

investment for the technological infrastructure will be crucial for Vietnam to improve in terms of

the efficiency in the production with the scarcity of available resources. The technology will help

to improve the productivity of the country which will the opportunity to increase the GDP for the

country. For instance, the investment for the infrastructure like the automation and e-commerce

platform had been positive for the deliveries within the production efficiency for the local

economic growth where the smaller population and workforce will likely to observe the

opportunity to grow further with less labour force involved (Caporale, 2022). This had been

extremely important to drive the manufacturing infrastructure to improve the automation to attract

better development in the economic towards the direction of the developed country. With the

higher productivity, the country of Vietnam will be able to expand the potential to increase the net

export within the GDP which will create the better prospect for the future in the economic growth

(Nguyen, 2022).
Besides, with Vietnam being surrounded by the South China East sea, the important to further

develop the port infrastructure indeed come into picture where ethe need for the water

transportation had been crucial for Vietnam to expanding the market for the goods and services

(Nguyen, 2022). The improvement in the port infrastructure in Vietnam will induce foreign

companies to perform the international trade with Vietnam which will be crucial in driving the

export for the country. Besides, the increase in the foreign trade will also improve the strength of

the local currency of Vietnam with the higher demand for the currency for the local transactions to

take place (Dapice, 2022). In addition, the availability for the port infrastructure will become the

positive influence to attract higher FDI which will induce more development of MNE to invest

and expand to the country which will contribute to the higher achievement of the GDP growth for

Vietnam (Davidson, 2022). Furthermore, the port infrastructure will provide higher readability for

the local business to export to more different countries due to the water transportation route for the

benefits of exporting process compared to depending only to the land transportation facilities.
References

Ansar, A. (2014). Does infrastructure contribute to economic growth? Micro-level evidence from

transportation projects in China. [online] Available at:

https://www.itrc.org.uk/itrcpublications/does-infrastructure-contribute-to-economic-

growth-micro-level-evidence-from-transportation-projects-in-china/ [Accessed 20 Nov.

2022].

Backer, K.D. & Miroudot, S. (2019). Multinational enterprises in the global economy: Heavily

discussed, hardly measured. [online] Available at:

https://cepr.org/voxeu/columns/multinational-enterprises-global-economy-heavily-

discussed-hardly-measured [Accessed 20 Nov. 2022].

Caporale, V. (2022). Why Vietnam’s Economic Future is Bright – and Growing Brighter. [online]

Available at: https://thediplomat.com/2022/09/why-vietnams-economic-future-is-bright-

and-growing-brighter/ [Accessed 20 Nov. 2022].

Dapice, D. (2022). Prospects and challenges for Vietnam’s economy in 2022. [online] Available at:

https://www.eastasiaforum.org/2022/02/11/prospects-and-challenges-for-vietnams-

economy-in-2022/ [Accessed 20 Nov. 2022].

Davidson, H. (2022). China growth lags Asia-Pacific for first time in decades as World Bank cuts

outlook. [online] Available at: https://www.theguardian.com/business/2022/sep/27/china-

growth-lags-asia-pacific-for-first-time-in-decades-as-world-bank-cuts-outlook [Accessed

20 Nov. 2022].

Hancock, T. (2022a). These Are the Megaprojects in China’s $1 Trillion Infrastructure Plan.

[online] Available at: https://www.bloomberg.com/news/features/2022-08-25/how-china-

will-spend-1-trillion-on-infrastructure-to-boost-economy?leadSource=uverify%20wall
 [Accessed 20 Nov. 2022].

Hancock, T. (2022b). China’s Infrastructure Boom Gets Swamped by Property Woes. [online]

Available at: https://www.bloomberg.com/news/articles/2022-08-17/china-infrastructure-

stimulus-isn-t-making-up-for-property-woes?leadSource=uverify%20wall [Accessed 20

Nov. 2022].

He, L. (2022). China’s economy is ‘in deep trouble’ as Xi heads for next decade in power. [online]

Available at: https://edition.cnn.com/2022/10/14/economy/china-party-congress-

economy-trouble-xi-intl-hnk/index.html [Accessed 20 Nov. 2022].

Huld, A. (2022). China Infrastructure Investment in 2022 – Can it Stimulate Economic Growth?

[online] Available at: https://www.china-briefing.com/news/china-infratsructure-

investment-in-2022-spurring-economic-

growth/#:~:text=Overview%20of%20China's%20infrastructure%20investment,5.1%20pe

rcent%20growth%20in%202019. [Accessed 20 Nov. 2022].

Kopp, C.M. (2022). Development Economics. [online] Available at:

https://www.investopedia.com/terms/d/development-economics.asp [Accessed 20 Nov.

2022].

Liang, A. (2022). What we just learned about China's economy. [online] Available at:

https://www.bbc.com/news/business-63296229 [Accessed 20 Nov. 2022].

Nguyen, D.T.U. (2022). Vietnam Sees Fastest Growth in Southeast Asia for Two Years. [online]

Available at: https://www.bloomberg.com/news/articles/2022-10-20/vietnam-sees-fastest-

growth-in-southeast-asia-for-two-years?leadSource=uverify%20wall [Accessed 20 Nov.

2022].

Pham, C. (2022). Why Vietnam’s Infrastructure is Crucial for Economic Growth. [online] Available
 at: https://www.vietnam-briefing.com/news/why-vietnams-infrastructure-crucial-for-

economic-growth.html/ [Accessed 20 Nov. 2022].

Puentes, R. (2015). Why Infrastructure Matters: Rotten Roads, Bum Economy. [online] Available

at: https://www.brookings.edu/opinions/why-infrastructure-matters-rotten-roads-bum-

economy/ [Accessed 20 Nov. 2022].

Vagliasindi, M. (2022). How does infrastructure support sustainable growth?. [online] Available

at: https://blogs.worldbank.org/digital-development/how-does-infrastructure-support-

sustainable-

growth#:~:text=Infrastructure%20affects%20growth%20through%20several,production

%20of%20goods%20and%20services. [Accessed 20 Nov. 2022].

World Bank. (2022a). GDP growth (annual %) - Vietnam, China. [online] Available at:

https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?end=2021&locations=VN-

CN&start=1990 [Accessed 20 Nov. 2022].

World Bank. (2022b). Lending interest rate (%) - Vietnam, China. [online] Available at:

https://data.worldbank.org/indicator/FR.INR.LEND?end=2021&locations=VN-

CN&start=2000 [Accessed 20 Nov. 2022].