HANOI: Tension with China over competing claims to portions of the South China Sea remain the top political risk in Vietnam.
India has now apparently been drawn into the long-standing dispute over territory, potentially increasing the stakes.
Meanwhile, authorities still face one of the world’s highest inflation rates — 22.42 percent in September — and will have to decide when to start loosening tight monetary conditions back to minimise the damage to growth.
All three major ratings agencies cut Vietnam’s credit ratings in 2010, highlighting economic risks and underscoring the problems in the southeast Asian country’s economy, once a favoured frontier investment destination.
In the South China Sea, the risk of unintentional escalation and even hostilities has been elevated since Vietnam and China exchanged fresh accusations of sovereignty violations at one another in late May, although the issue has come off the boil.
In mid-October, the two countries signed an agreement aimed at containing the dispute. (Reuters)
