Vietnam, much like China some seven years earlier, dismantled the agricultural cooperatives and gave agrarian production back to the peasants (this is something Russia never did and the Central European countries did not do either). So in one stroke Vietnam eliminated food shortages and as far as we can tell dramatically reduced poverty during transition (while as we saw poverty skyrocketed in the former USSR and its European satellites). Vietnam also followed China by NOT combining perestroika with glasnost, hence retaining the political monopoly of the Communist Party, what arguably was the precondition – but for a price what many would judge to be unaffordable – of a gradualist transformation (this again is something what distinguished Vietnam and China from the European post-communist regimes – see this point in Yamaoka 2007. 9.) Nevertheless, Vietnam’s reforms were not only later than the Chinese, they also had more of a shock element. While Vietnam did not rush to mass privatization, it moved more aggressively to market liberalization, shut down early state enterprises, opened faster rooms for the private sector and opened up its borders to FDI (Bunck 1996. 236.). Hence I may argue Vietnamese “capitalism from below” came with a “neo-liberal” flavour. Nevertheless, Vietnam never experienced the transitional recession/depression mainly because in the first stages of reform the rapidly expanding household sector absorbed most of the costs (and labour freed from SOEs – see McCarty 2000.) So far Vietnam is a “success story” – much like China is. They managed the transition without the frightening costs other post-communist transformation trajectories could not avoid.
But both for China and Vietnam the BIG question is – much like for the neo-patrimonial/ rentier states, but for a different reason – sustainability. There are two major reasons why the East Asian transformation from below is vulnerable: (i) will they be able to retain their export led industrialization once the price of their labour will catch up with the rest of the world? (ii) can the political monopoly of the communist party maintained under market capitalist conditions and if it cannot is a “gradualist” transformation of the political system conceivable? If it is not and political systems either stay or fall, what would be the social and economic consequences of such a political disintegration?