Expanding national productive capacities for maintaining economic stability

Abstract

The paper evaluates the improvement in productive capacities and its influence on the macroeconomic stability of Vietnam. Analyzing the export structure and product space from 2000 to 2020
reveals that Vietnam has accumulated new and advanced productive capacities over the past two decades.
However, not only have these productive capacities lagged behind those of high-income countries but they
also have been increasingly dependent on foreign inputs. So that national productive capacities should be
critically restructured. These new productive capacities will decide which goods should be produced to make
Vietnam become a part of global production network, the amount of consumed inputs and value added, job
creation, and economic resilience against shocks. In addition, national productive capacities strategy should
incorporate the global production trend in the next several decades, such as increasing localization rate and
green products standards