Economic System


The State promotes a multi-component commodity economy functioning in accordance with market mechanisms under the management of the State and following the socialist orientation. The multi-component economic structure with various forms of organization of production and trading is based on a system of ownership by the entire people, by collectives, and by private individuals, of which ownership by the entire people and by collectives constitutes the foundation.

The aim of the State's economic policy is to make the people rich and the country strong, satisfy to an ever greater extent the people's material and spiritual by releasing all productive potential, developing all latent possibilities of all components of the economy - the State sector, the collective sector, the private individual sector, the private capitalist sector, and the State capitalist sector in various forms - pushing on with the construction of material and technical bases, broadening economic, scientific, technical co-operation and expanding intercourse with world markets.

The land, forests, rivers and lakes, water supplies, wealth lying underground or coming from the sea, the continental shelf and the air, the funds and property invested by the State in enterprises and works in all branches and fields - the economy, culture, society, science, technology, external relations, national defence, security - and all other property determined by law as belonging to the State, come under ownership by the entire people.

The State manages all the land in accordance with the plan and the law, and guarantees that its use shall conform to the set objectives and yield effective results.
The State shall entrust land to organizations and private individuals for stable and lasting use.
These organizations and individuals are responsible for the protection, enrichment, rational exploitation and economical use of the land ; they may transfer the right to use the land entrusted to them by the State, as determined by law.

The State sector shall be consolidated and developed, especially in key branches and areas, and play the leading role in the national economy.

The State-run enterprises enjoy autonomy in production and trading and shall guarantee that production and trading are to yield effective results.

The collective sector growing out of the pooling by citizens of funds and efforts for co-operative production and trading shall be organized in various forms following the principles of free consent, democracy, and mutual benefit.

The State shall create favourable conditions for consolidating and broadening the co-operatives and allowing them to operate efficiently.

In the private individual and private capitalist sectors people can adopt their own ways of organizing production and trading; they can set up enterprises of unrestricted scope in fields of activity which are beneficial to the country and the people. Encouragement shall be given to the development of the family economy.

Production and trading enterprises belonging to all components of the economy must fulfil all their obligations to the State; they are equal before the law; their capital and lawful property shall receive State protection.

Enterprises belonging to all components of the economy can enter into joint venture and partnership with individuals and economic organizations at home and abroad in accordance with the provisions of the law.

The lawful property of individuals and organizations shall not be nationalized.

In cases made absolutely necessary by reason of national defence, security and the national interest, the State can make a forcible purchase of or can requisition pieces of property of individuals or organizations against compensation taking into account current market prices.

The formalities of the forcible purchase of requisition shall be determined by law.

The State manages and expand external economic relations, promotes economic ties of all kinds with all nations and all international organizations on the basis of the principles of respect for each other's independence and sovereignty, mutual advantage, and aiming at the protection and stimulation of domestic production.

The State encourage foreign organizations and individuals to invest funds and technologies in Vietnam in conformity with Vietnamese law and international law and usage; it guarantees the right to lawful ownership of funds, property and other interests by foreign organizations and individuals. Enterprise with foreign investments shall not be nationalized.

The State creates favourable conditions for Vietnamese residing abroad to invest in the country.

The State manages the national economy by means of laws, plans and policies; it makes a division of responsibilities and devolves authority to various departments and levels of the administration; the interests of individuals and collectives are brought into harmony with those of the State.

The State shall practice economy in all its economic, social and managerial activities.

All illegal production and trading activities, all acts wrecking the national economy and damaging interests of the State, the rights and lawful interests of collectives and individual citizens shall be dealt with severely and equitably by the law.

The State shall enact policies protecting the rights and interests of the producers and the consumers.

State organs, units of the armed forces, economic and social bodies, and all individuals must abide by State regulations on the rational use of natural wealth and on environmental protection.
All acts likely to bring about exhaustion of natural wealth and to cause damage to the environment are strictly forbidden.