The world\u2019s largest soccer stadium, designed to resemble a Vietnamese drum with space for 135,000 fans, began to take shape outside central Hanoi in February, a few weeks before the United States and Israel attacked Iran.<\/p>\n
Despite the global economic turmoil brought about by the war, and perhaps even because of it, construction on the arena and a surrounding urban development has expanded and accelerated.<\/p>\n
The Vietnamese government is leaning on big projects to make up for potential economic slowdowns caused by the war and President Trump\u2019s tariffs. Huge, state-favored firms like Vingroup, which is building the stadium, are booming. So are foreign manufacturing giants that have made Vietnam an export hub, all while smaller businesses are struggling to survive and often being pushed aside.<\/p>\n
\u201cFor small companies like us, it\u2019s so challenging, it\u2019s harder, and it\u2019s not fair,\u201d said Pham Thi Mui, 36, as she stuffed a Spider-Man comforter into a bag at her family\u2019s bedding factory near the stadium, on land that is soon to be redeveloped. \u201cWe pour our hearts into everything, and we\u2019re the first to suffer.\u201d<\/p>\n
The dynamic exemplifies how the war in Iran, and the economic shock waves it precipitated, are accelerating a trend in Vietnam, and around the world: Big businesses find a way to get bigger, while smaller, local companies are being squeezed by spiking<\/a> inflation or energy shortages<\/a>. The Vietnamese government and banks, overinvested in certain industries, especially real estate, have not been much help.<\/p>\n Too Big to Fail?<\/p>\n Experts have expressed both optimism and concern for this ambitious country of 100 million. The World Bank\u2019s most recent report on Vietnam<\/a> referred to an \u201cuneven growth model,\u201d where global firms drive exports but generate limited local benefits, because wages are low and few Vietnamese companies are integrated into higher-value supply chains.<\/p>\n Jonathan Pincus, an economist at Fulbright University in Ho Chi Minh City, described it as \u201ca two-track economy.\u201d Essentially, the wealthiest firms rarely interact with the smaller businesses that represent 95 percent of the country\u2019s companies.<\/p>\n Vietnamese officials have acknowledged the problem for years, noting that sustainable development requires a strong domestic business base. But with Communist Party leaders pushing hard for 10 percent annual growth, and managing only 7 so far this year, officials still chase scale. Big-ticket foreign investment is seen as an elevator to career promotion in the party, and the turmoil of the past few months has only intensified the government\u2019s go-big and globalist focus<\/a>.<\/p>\n While Hanoi remains concerned that Washington will punish it for exporting far more to the United States than it buys, Vietnam continues to successfully recruit companies fleeing China partly to avoid and circumvent U.S. tariffs.<\/p>\n Shipping data shows that in the first quarter of this year, China\u2019s container traffic to the United States fell by 14 percent, while Vietnam\u2019s rose by 19 percent. Some of those shipments might be Chinese exports, relabeled or barely altered \u2014 which the Trump administration has threatened to treat as an illegal effort to bypass tariffs \u2014 but experts report a deeper shift, with Chinese firms opening more factories in Vietnam.<\/p>\n \u201cThe main takeaway is that Vietnam is gaining market share,\u201d said Soren Pedersen, a vice president at SSA Marine, a large global port operator.<\/p>\n The war in Iran initially seemed to threaten that shift. After Iran effectively closed the Strait of Hormuz, the critical shipping route for much of the oil and gas headed to Asia, worries about manufacturing and transportation disruptions dominated business discussion \u2014 until Vietnam found a lifeline in countries that were well-established economic partners.<\/p>\n South Korea, Vietnam\u2019s top source<\/a> of foreign investment, increased its refined petroleum exports for Hanoi in March and April by 60 percent compared with January and February, according to Vietnamese customs data.<\/p>\n China, another major investor<\/a>, also sent 120 million tons of refined petroleum to Vietnam in March, despite a publicly declared ban on such exports. And Vietnam\u2019s imports from China of liquefied petroleum gas, an energy source for manufacturing, more than doubled in March and April over the two prior months, as supplies from the Middle East fell to nearly zero.<\/p>\n