ABSTRACT
This chapter focuses on three important areas of reform: the development of a multi-sector economy; the market-oriented transition process; and the reform of industrialization and trade strategies. Economic renovation has consisted of policies promoting the integration of Vietnam into the world economy, creating a market-oriented economy, and establishing a system of new institutions that are appropriate to the changing conditions of Vietnam's socio-economy. The state budget subsidized losses of state-owned enterprises (SOEs); on the other hand, it was also to benefit if these enterprises made profits. Hence, the state subsidized productive activities by supplying inputs at low prices. Central bureaucratic management and state subsidies to SOEs continued; and SOEs were unable to increase their economic efficiency. Along with the diversification and expansion of foreign relations, the government has initiated policies that will attract foreign direct investment (FDI).
