HO CHI MINH NATIONAL ACADEMY OF POLITICS

NGUYEN VAN SON

THE TRANSFORMATION
OF SOCIALIST PRODUCTION RELATIONS
DURING THE REFORM PERIOD OF VIETNAM

SUMMARY OF THE PHD THESIS

FIELD OF STUDY: DIALECTICAL AND HISTORICAL MATERIALISM
Code: 62 22 03 02

HA NOI - 2017
 The thesis is completed at the
Ho Chi Minh National Academy of Politics

Supervisors: 1. Assoc. Prof., Dr.Tran Ngoc Linh

2. Assoc. Prof., Dr.Vu Hong Son

Reviewer 1: ..............................................................

Reviewer 2: ..............................................................

Reviewer 3: ..............................................................

The thesis will be defended in front of the Thesis Committee at

Academy level, at the Ho Chi Minh National Academy of Politics
At…… hour…… date …… month …… year 2017

The thesis can be found at the National Library and the Library
of Ho Chi Minh National Academy of Politics
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INTRODUCTION

1. The necessity of the thesis

The rule of "production relations are in line with the level of productive
force" has especially important meaning in social rules because it is the
fundamental rule that governed the development process of human society.
In Vietnam, before renovation period, socialist production relations were
impatiently established. We had removed other types of production relations while
the level of production forces was low, new production relations went far beyond
the level of productive forces, inhibited the development of productive forces
which led to the socio-economic crisis.
In the renovation years, we have applied correctly and creatively the rule:
"production relations are in line with the level of productive force", having
adjusted production relations to be in line with the level of productive forces by
developing a diverse range of production relations, including socialist production
relations, which provides a fundamental turning point in socio-economic
development. However, along with the achievements, production relations are still
inappropriate and limited in releasing of production forces. Therefore, it is
necessary to continue to adjust production relations to be in line with production
forces in order to release production forces and boost production development.
At present, there are many factors affecting the socialist production relations
in our country, along with the trend of globalization, cooperation and
regionalization which are happening strongly. Therefore, studying about
adjustment of socialist production relations to develop production and make our
country integrate with the general trend is very necessary.
In the transitional period to socialism in our country, there are many
different kinds of production relations such as: the pre-capitalist production
relations, the capitalist production relations, and the socialist production relations...
in which, socialist production relations in our country are always determined as a
leading role in the national economy. Along with reforming process of the
country, socialist production relations have also been constantly renewed and
improved. The Party affirmed the construction and improving of socialist
production relations as a regular and continuous task during the transitional period
to socialism in order to boost production.
The construction of socialist production relations in transitional period in
our country is very necessary but also very difficult, complex. Because this is
an unprecedented path which requires experiment during process of
construction. Therefore, through each period, it is imperative to adjust the
production relations to promote production development and maintain the
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socialist orientation. In accomplish this task, it is necessary to research the

transformation of socialist production relations from the time of its formation,
especially in the renovation period.
Because of the above reasons, the author has chosen the topic “The
transformation of socialist production relations during the reform period of
Vietnam” for his PHD thesis.
2. Research objectives and tasks
2.1. Research objectives
Based on theoretical analysis and situation of changing socialist production
relations in Vietnam, the thesis contributes to recommend a number of major
directions and solutions to promote positive changes, to limit the negative changes
of socialist production relations in order to promote production development.
2.2. Tasks of the thesis
- To research some basic theoretical viewpoints on socialist production
relations and factors affecting the transformation of socialist production relations
in the period of reform in Vietnam.
- To analyze the reality of transforming the socialist production relations in
the reform period of socialist construction in Vietnam.
- To contribute to a number of major orientations and solutions to promote
positive changes, limit the negative changes of socialist production relations in
Vietnam nowadays.
3. The rationale and research methods
3.1. The rationale
The thesis is based on the rationale of Marxism-Leninism, Ho Chi Minh's
ideology, the Party and State's viewpoints, guidelines and policies on production
relations and socialist production relations in our country during the period of
reform.
The thesis also inherits the theoretical viewpoints of the scientists on the
relevant content.
3.2. The research method
The thesis uses a combination of research methods of dialectical materialism
and historical materialism to interpret the contents, focusing on the following
methods: history - logic, analysis, and synthesis, comparative, inductive -
interpretative, so on to carry out the designed tasks.
4. Subject and scope of the research
4.1. The research subject
The thesis researches the movement and transformation of socialist
production relations in our country in the period of reform which is defined in two
components: the state economy and the collective economy.
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4.2. Scope of the research

The thesis studies the movement and transformation of the state economy
and the collective economy from 1986 to the present.
In the state economy, the thesis does not study the whole of this economic
component, but study and survey the state-owned enterprises that are the core part
of state economy. In the composition of collective economy, the thesis focuses on
surveying cooperatives as a pillar of the collective economy, thus contributing to
making some major solutions to promote positive changes and limit the negative
changes of socialist production relations in Vietnam's reform period.
5. New contributions of the thesis
The thesis researches the factors that influence the transformation of
socialist production relations in the period of reform in Vietnam.
The thesis researches the role of socialist production relations in the period
of reform in our country.
The thesis clarifies situation of transformation of socialist production
relations in the period of reform in Vietnam.
The thesis contributes to the analysis of remaining issues of socialist
production relations in Vietnam today.
The thesis initially proposes a number of orientations and solutions to
promote positive changes and limit the negative changes of socialist production
relations in Vietnam today.
6. Theoretical and practical meanings of the thesis
6.1. Theoretical meanings
The thesis contributes to raise awareness about the role of production
relations in general and the role of socialist production relations in Vietnam in
particular during the country's socio-economic development.
The thesis can be used as a reference material for research, teaching and
interested people.
6.2. Practical meanings
The viewpoints and proposed solutions may suggest to the authorities, the
leaders to have the appropriate adjustments to promote positive changes, limit the
negative changes of socialist production relations in our country.
7. Structure of the thesis
In addition to the introduction, conclusion, list of published scientific works
of the author related to the thesis and references, the thesis consists of 4 chapters,
10 sections.
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Chapter 1
LITERATURE REVIEW ON RELATED RESEARCH
OF THE THESIS TOPIC
1.1. RESEARCH WORKS RELATED TO THE GENERAL THEORY ON
SOCIALIST PRODUCTION RELATIONS IN THE PERIOD OF REFORM IN
VIET NAM
In the process of researching and collecting materials, we find that there are
many in-depth research works on socialist production relations. These works
research socialist production relations on different levels as follows:
"Marxist viewpoint of ownership and some thoughts on ownership in our
country today" by Vu Hong Son. "Some theoretical- practical issues on socialism
and the way to socialism in Vietnam” by Phung Huu Phu, et al. The topic:
"Research and summary to clarify some theoretical issues on the relationship
between development of production forces and construction forces, gradually
improve socialist production relations" of the Institute of Philosophy, Ho Chi
Minh National Political Academy, chairman by Tran Van Phong. “Private
ownership and private economy in Vietnam today - some issues of perception on
theory and reality “by Luong Minh Cu - Vu Van Thuc." The ownership issue in a
market economy of socialist orientation in Vietnam" by Nguyen Ke Tuan
(editors)," Ownership issues and sustainable development in Vietnam and China
in the early years of the 21st century "by Luong Viet Hai (editor). “Collective
Ownership and Collective Economy in a Socialist-Oriented Market Economy in
Vietnam “by Chu Van Lam (editor)," Building Socialist-Oriented production
Relations and make progress in social justice in Vietnam "by Luong Xuan Quy.
The second basic aspect of production relations - the relationship among
people in organizations, production management - is also the subject of many
research works as follows:
Reforming management and equalizing state-owned enterprises in order to
improve competitiveness and efficiency by Phu Giang, Vietnam's economic theory
and reality by Vo Dai Luoc; State-owned enterprise management - Inadequacy
and innovative proposal by Nguyen Canh Nam, High quality human resource
development: experience from Viettel by Nguyen Thanh Nam, State-owned
enterprise model in Vietnam until 2020 by Pham Quang Trung...
Relationships among people in product distribution are also one of the
fundamental aspects of production relations. However, in the process of exploring
and collecting documents, we find that there are not many in-depth research works
on this issue. Here are some of the researches we have approached. The general
theory of distribution of socialism, by Li Bing - Chinese. "The distribution of
 5

products in the transitional period to socialism in our country today" by Nguyen

Duc Luan.
1.2. RESEARCH WORKS RELATED TO SITUATION OF THE
TRANSFORMATION OF SOCIALIST PRODUCTION RELATIONS IN THE
PERIOD OF REFORM IN VIET NAM
Over the years, there have been many works, articles related to the reality of
socialist production relations in different perspectives, such as:
"Vietnam economy through 30 years of transformation" by Pham Quy Tho,
Publishing House of Information and Communication. "Debt of state-owned
enterprises: the threat of Vietnam's public debt", Journal of Economic Research
(453) by Pham The Anh. "Some Challenges in the Equalization of state-owned
enterprises in Vietnam" by Nguyen Duc Do, Financial Times Magazine, 10/2016.
"Reforming the growth model, restructuring the economy" of the Central
Economic Committee, led by Mr. Vuong Dinh Hue. "Reforming management of
state-owners towards State economic corporation in Vietnam" by Phung The
Hung. "State-owned enterprises in a socialist-oriented market economy" by the
authors of the Central Committee's Scientific Council, chaired by Nguyen Duy
Hung. "State management with state-owned economic corporation in Vietnam" by
Nguyen Thi Ha Dong. "The Nature of ownership in a multi-sectoral economy in
Viet Nam”, "The new wind for economic cooperation” by Thu Huong, published
in Business Times Magazine No. 245, December, 2016. "The nature of ownership
in the multi-sectoral economy in Vietnam" (2006) by Zhang Jiang Long.
1.3. RESEARCH WORKS RELATED TO DEVELOPMENT SOLUTIONS
FOR SOCIALIST PRODUCTION RELATIONS IN THE PERIOD OF REFORM
IN VIET NAM
Over the years, there have been many works that have proposed solutions to
develop socialist production relations in our country in different aspects as
follows:
"A number of theoretical and practical issues of socialism and the road to
socialism in Vietnam" by Phung Huu Phu, Le Huu Nghia, Vu Van Hien and
Nguyen Viet Thong (co-editors). "New thinking on socio-economic development
of Vietnam in the new context" by Luong Xuan Quy. "Economic Corporation in
Promoting Economic Restructuring" by Nguyen Huu Dat and Ngo Tuan Nghia
co-editor.
"State-owned enterprises in the socialist-oriented market economy" by the
authors of the Scientific Council of the Central Party. "Reforming the efficiency of
state-owned enterprises, ensuring the leading role of the state economy in the
socialist-oriented market economy" by Ta Ngoc Tan and Le Quoc Ly as the editor
and publisher, 2012. "Development of collective economy in 30 years of reform in
 6

Vietnam" by Vu Kim Cu. "International Cooperative Experiences and reality in

Vietnam" by the Department of Planning and Investment.
1.4. OVERVIEW OF RESEARCH RESULTS OF SCIENTIFIC
WORKS RELATED TO THE THESIS AND ISSUES THAT NEED FURTHER
STUDY
1.4.1. Overview the research results of scientific works related to
the thesis
After surveying researches related to the thesis’s contents, the authors can
overview the following results:
Firstly, the works have researched the theory of socialist production
relations in terms of:
- Researching the theory of Marxism-Leninism on the ownership and
application of the Vietnam Communist Party to the cause of reform. All the
research works confirm the need to develop diversified forms of ownership, to
form a socialist-oriented market economy in our country.
- Researching the general economic model in our country during the
transitional period to socialism. In this area, there are authors such as Phung Huu
Phu, Tran Van Phong, Truong Giang Long ... All authors affirm that the socialist-
oriented market economy in our country is a modern, integrating market economy
with many forms of ownership, various economic sectors; in which state economy
plays the major role. The major role of State economy is the peculiarity of our
economy to lead the orientation towards socialism, socialist production relations
are not only suitable but also progressive as the Party affirmation in the document
of the 12th Congress "have the progressive production relations, which suit the
level of production force."
Secondly, the works have researched the reality of socialist production
relations in Vietnam during the period of reform.
The researches belong to this group are reflected in research works on state-
owned enterprises, economic corporations and cooperatives in our country during
the period of reform. Especially, in the recent years, when the economic crisis
affects our country, it clearly exposed the limitations of socialist production
relations. The works have shown the urgent, negative aspects of socialist
production relations such as: big losses of state-owned enterprises, the weakness
of Cooperatives in Vietnam. These are overly references to the author when
writing chapter 3 with the content on the status of the transformation of socialist
production relations in Vietnam in the period of reform.
Thirdly, the works have provided directions and solutions to promote the
positive effects, limit the negative effects of the state economy and collective
economy. These are the necessary references to chapter 4 of the thesis. However,
 7

in each of these research works, the authors mainly provide directions and
solutions to the content they have studied that are each aspect, each specific part of
the production relations. Thus, in addition to the successor of the predecessor, the
solution also provides a direction and some of its principal solutions to promote
positive changes, limit the negative changes of the socialist productive relations in
Vietnam today.
1.4.2. The arising issues that need further study
From literature review on related research of the thesis topic and the results
that are already outlined above, the author presents some issues that the thesis
needs to focus on.
Firstly, to systemize the theory of Marxism-Leninism and some of the
Communist parties in the world and the Communist Party of Vietnam on
production relations and socialist production relations
Secondly, to research the factors that influence the transformation of
socialist production relations in our country in the context of globalization and
cooperation which is going on strongly.
Thirdly, to research the role of socialist production relations in the period of
reform, the orientation to socialism in Vietnam
Fourthly, to research the reality of changes of socialist production relations
in the period of reform.
Fifthly, to propose major directions and solutions to promote positive
changes and limit the negative changes of the socialist production relations in
Vietnam today.

Summary of chapter 1

Based on an overview of the research works related to the thesis topic, it can
be seen that there have been many research works on production relations and
socialist production relations up to now in the period of reform in our country.
Research works on various aspects and approaches. However, the research on
socialist production relations from a philosophical point of view is not much.
Hence, the thesis continues to inherit the results of the predecessors to apply to
researching the transformation of socialist production relations in the reform
period in Vietnam, to interpret the proposed issues in terms of philosophy. In
doing so, the author believes that his research will have a certain contribution to
the system of research works on socialist production relations in our country and
contribute to the reference material for policymakers involved in socialist
production relations in Vietnam.
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Chapter 2
SOCIALIST PRODUCTION RELATIONS IN THE PERIOD OF
REFORM IN VIET NAM- SOME GENERAL THEORETICAL ISSUES
2.1. SOCIALIST PRODUCTION RELATIONS AND ITS ROLE IN THE
PERIOD OF REFORM IN VIET NAM
2.1.1. Conception of production relations and socialist production
relations
2.1.1.1. Conception of Marxism-Leninism in production relations
* Concept of production relations
Production relations are the concept of historical materialism, which refers
to the relations among people in the process of material production. This is the
basic economic relations that characterize a certain socialist regime. Production
relations consist of three aspects: the ownership relations on the means of
production, the relations on the organization of production management, the
relations on the distribution of products.
* Structure of production relations
The above concept shows that production relations consist of three basic
aspects: relations among people on ownership of production materials,
organization, production management, distribution of labor products. In those
aspects of production relations, the ownership relations on the means of
production materials are the starting relations, the basic relations, and characterize
the production relations in each society. Ownership relations on the means of
production determine relations in the organization of production management,
product distribution relations, and other social relations.
* Production relations in a socio-economic form
A particular society usually consists of three basic types of production
relations: The dominant production relations, the remnant production relations of
the old society and the seed production relations of the future society, in which
dominant production relations always play a leading role, dominating other
productive relations; They regulate the general trend of socio-economic life and
create the infrastructure of a specific society to distinguish one society from
another. However, remnant production relations and seed production relations also
have a certain role and interactive impact; production relations play a major role.
2.1.1.2. Conception on socialist production relations of the Marxist-
Leninist classics and some communist parties
* The Marxist-Leninist conception on socialist production relations
The characteristic of socialist production relations on ownership, according
to the Marxist, is the abolition of private regime, the establishment of a public
 9

regime of production materials that demonstrate superiority, progress of socialism,

creating an economic basis for building an equal, equitable, and progressive
society. This is a difficult, long, complex process, can not be immediately
obtained.
On organization, management of socialist production relations is established
on the basis of voluntariness and self-awareness differing from that of capitalist
management which exploits the surplus value. Distribution relations of socialist
production relations, according to Marxism-Leninism, the principle of labor
distribution is the most basic principle of distribution. That is the principle of equal
labor, the same enjoyment, is the principle, according to C.Mark, shows equality
in socialism.
* Conception of some Communist Party on socialist production relations
Communist parties around the world have recognized and manipulated the
doctrines of Marxism-Leninism differently on socialist production relations. The
Soviet Union and Eastern Europe previously thought it was a centrally planned
mechanism, while Yugoslavia considered it as a self-governing regime, while
China said that both public and private regime were important.
* Conception of the Communist Party of Vietnam on socialist production
relations
The socialist production relations in our country is a type of production
relations based on: the public regime of the main production materials, that
organizational relations are the socialist-oriented market economy, with the
various forms of distribution; Distribution by labor, contribution and welfare, of
which labor distribution is the most basic form.
The socialist production relations in our country are expressed in two
economic sectors: the state economy and the collective economy.
The Party insists: "The state economy plays the leading role. Collective
economy is constantly being strengthened and developed. State economy and
collective economy are increasingly becoming a solid foundation of the national
economy. "
2.1.2. The role of socialist production relations in the period of reform
in Viet Nam
2.1.2.1. The role of socialist production relations for the development of
productive forces in Vietnam in the period of reform
Firstly, production relations strongly promote the development of
production forces when they suit the level of productive forces.
The relevance of production relations to the level of production forces is an
objective requirement for the development of production forces; Production forces
can only develop when they have proper production relations. If production
 10

relations do not suit, production forces will be constrained, production will be

stagnant.
Secondly, production relations will constrain the production forces when it
does not suit the level of production forces.
From the conception of the Communist Party of Vietnam, it is not only
obsolete and backward production relations that constrain, have negative effects
on the productive forces, but even production relations which exceed far beyond
the level of production forces also constrain, have negative effects on production
forces.
2.1.2.2. The role of socialist production relations for the reinforcement
and improvement of superstructure and socialist orientation in Vietnam in the
period of reform
Socialist production relations play an important role, consolidating the
improvement of superstructure in Vietnam.
The economic basis in the transitional period determined by the Party and
State in the period of reform is: to develop a multi-sector commodity economy,
to operate with the market mechanism under the leadership of the Party and
socialist orientation. In the multi-sector economy in our country, there are many
types of production relations, many economic sectors, in which the Party
determines the socialist production relations must gradually become the
foundation of the national economy. This is the basis for consolidating and
improving superstructure in our country.
The role of socialist production relations in the socialist-oriented
development process in Vietnam.
The conception of the Party and State has always affirmed the leading role
of the state economy, while considering assurance and promotion of the leading
role of the state economy is one of the basic contents for maintaining socialist
orientation in our market economy.
2.2. AFFECTING FACTORS TO THE TRANSFORMATION OF
SOCIALIST PRODUCTION RELATIONS IN VIETNAM IN THE PERIOD OF
REFORM
2.2.1. Production forces
The transformation of production relations results from many factors that is,
first and foremost, a production force.
The tendency of material production is to constantly move, transform and
develop. That transformation and development ultimately come from the
transformation and development of productive forces. The movement,
development of the production forces determines and transforms the suitable
production relations.
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Along with the development of production forces, the production relations

have suitable movement, development. The relevance of the production relations
to the level of the production force is an objective inevitability given the level of
production forces.
In the process of building socialism in our country, our Party is well aware
of our shortage of modern production force in the construction of socialism. Then,
the Party has issued many policy guidelines to promote the development of
production force, such as: accelerating the industrialization and modernization of
the country, science and technology together with education and training as the top
national policies. Along with the conception of "leapfrog", we have applied the
new achievements of the revolution in science and technology to production, such
as: information technology, biotechnology, new material technology...This, in
turn, makes the production force in our country develop strongly, the level of
production force is constantly raised. According to the rule of material production,
the production force determines the transformation of the production relations;
thus, when the production force has developed strongly, the demand for
adjustment of socialist production relations is necessary in order to ensure the
relevance with the new level of current production force in Vietnam.
2.2.2. Superstructure
The superstructure has a strong impact on the transformation of production
relations, particularly the direct leadership of the Party and the management of the
State. Especially, in the transitional period of socialist construction in our country,
the socialist production relations are greatly affected by the Party's orientation role
and the leadership process of the State.
2.2.3. Globalization, international and regional economic integration
In our country, globalization affects the socialist production relations on
three aspects: ownership, management organization, and product distribution. In
terms of ownership of production materials, the process of globalization has
attracted a considerable amount of capital into our country, including both ODA
and FDI, and billions of dollars of foreign investment into Vietnam has formed the
transformation on ownership which led to an increase of the mixed ownership
form. Foreign investment can be linked to state-owned enterprises on a number of
areas such as oil and gas, electricity, banking, electronics, textiles, etc, which
results in the formation of the state capitalist economic sector. When participating
in the globalization, the increasingly fierce competition with the ineffective
business of state-owned enterprises force us to equities, divest capital to
restructure state-owned enterprises, thereby reducing the amount of state-owned
capital, but the use is more efficient.
 12

In terms of management organization, when participating in globalization

with the association, joint-ventures with foreign enterprises, we can learn the
experience of organization and management from advanced countries. On the
other hand, due to the competition with large transnational companies, we have to
change management, form corporations and state-owned economic groups in order
to create sufficient power to compete. Thus, the organizational and managerial
model of socialist production relations has been transformed to suit the realities.
In terms of product distribution, it is also affected, since foreign capital
invests in our country to compete, attract workers, talents, they often pay higher
wages than state-owned enterprises. Therefore, it forces state-owned enterprises to
increase wages for workers and improve the living standards of workers. In
addition, foreign enterprises always take into account the economic efficiency so
that they pay the right and proper labor; therefore, our state-owned enterprises also
learn about better labor distribution to stimulate the positive, creative work of the
workers.
2.2.4. Other production relations
In our country, in the transitional period to socialism, there are many kinds
of production relations, which are due to the level of production forces in our
country. Due to the different nature of production relations, they are both united
and conflicting. That affects both socio-economic forms in transitional period.
The production relations in our country are both united and conflicting,
having interactive effect on each other, promoting each other to develop together
to create an infrastructure of the transitional period to socialism in our country,
under the guidance and support of socialist production relations.

Summary of chapter 2

Theory on production relations and the role of production relations for the
productive forces development and superstructure are the basic contents of
historical materialism. According to Marxist-Leninist, production relations have a
dual-acting role in a socio-economic form, on the one hand promoting or
constraining the development of productive forces; on the other hand, production
relations are also the basis, the foundation for the formation of a corresponding
superstructure.
For our country, in the transitional period to socialism, there are still many
different forms of production relations, the socialist production relations play an
especially important role in promoting the development of production forces,
laying the foundations for the leadership of the Party, the management of the State,
and leading forms of other production relations to socialism.
 13

Today's reality shows that the movement and transformation of socialist

production relations in our country are influenced by many different factors, which
is, first and foremost, the productive forces. Production forces are constantly
moving and transforming, which require production relations to be transformed to
ensure the relevance. The superstructure, which is under the direct leadership and
direction of the Party and the management of the State, has a strong impact on the
movement and transformation of socialist production relations in our country.
Other types of production relationships in our country are both united and
conflicting, have an interactive effect on each other, creating typical infrastructure
of the transitional period in our country, thus also affecting the transformation of
socialist production relations. Globalization factors, regional and international
cooperation, international factors also contribute to the transformation of socialist
production relations which creates both opportunities and challenges in the process
of integration in Vietnam.
The clarification of these theoretical issues is an important basis for the
research and transformation of socialist production relations in our country today.

Chapter 3
STATUS OF THE TRANSFORMATION
OF SOCIALIST PRODUCTION RELATIONS DURING THE REFORM
PERIOD OF VIETNAM AND ISSUES OF CONCERN

3.1. STATUS OF THE TRANSFORMATION OF SOCIALIST PRODUCTION

RELATIONS DURING THE REFORM PERIOD OF VIETNAM
3.1.1. Status of the transformation of socialist production relations
during the reform period of Vietnam in state economy
In a broader sense, State economy consists of two main areas: state-owned
enterprises and non- business state economy such as national resources, national
reserves, the state banking system, state insurance system in which state-owned
enterprises play a key role.
In a narrow sense, the state economy is synonymous with the system of
state-owned enterprises.
There has been changes and mobilization of the state economy through
different stages:
* From1986 to 2001
The socialist production relations in our country has been marked by
landmark reform which was reflected in the documents of the VI, VII, VIII
Congress and other legal documents of the Party and State. They are reflected in
 14

all three aspects of production relations: ownership, management and distribution.

The followings provide more detail:
Firstly, with regard to ownership relations.
The economy with multi-ownership, many economic components have been
formed and developed. There has been a transformation from an economy with
only two forms of ownership: people ownership and collective ownership and two
economic sectors: state economy and collective economy. At the ninth congress,
we have 6 economic components: Public sector, collective economy, private
economy, private capitalist economy, foreign-invested economy, and state
capitalist economy.
We have equitized state-owned enterprises in order to transfer ownership in
SOEs. Especially, in 1992 we piloted equitization which is an important turning
point in trying to find a new direction to improve investment efficiency and
improve business results of state-owned enterprises.
The equitization of state-owned enterprises has been strongly implemented.
According to statistics, in the period "from 1992-2000, we have equitized 588
state-owned enterprises, with a particular concentrated on the period 1996-2000.
(About 583 companies). Most of the equitized enterprises do their businesses
better than before."
Secondly, with regard to on organizational and management relations,
management.
We have stepped up the rearrangement of state-owned enterprises to
gradually reduce the number of state-owned enterprises, such as assigning, selling,
leasing and bankrupting enterprises.
After the reform, State-owned SOEs in this period declined rapidly.
According to statistics, 12,000 enterprises in 1986 was reduced to 5280 enterprises
in 2000. Despite the decline, contributions to GNP remained stable at rates of
30.5% and 31.01% in the 1998-2000 period respectively.
The restructuring of state-owned enterprises also reduced the number of
enterprises but increased the size of enterprises. "The number of enterprises with
capital of VND 1 billion fell by almost 50% in 1994 to 33% In 1996, and 26% in
1999. The number of enterprises with capital of more than 10 billion increased to
10%, 15% and 20% in 1999 respectively. At the same time, the average capital for
a business has also increased from 3.3 billion more than 11 billion in 1996 and
over 18 billion in 1999".
In this stage we have established 17 general corporations of 91 and 76
general corporations of 90 operating in important sectors of the country such as
iron, cement, oil and gas, food. Through this, general corporations have mobilized
 15

capital to renovate technology, expand production and increase competition and

exploit domestic and foreign markets.
Thirdly, with regard to the distribution relationship.
During this period, the distribution mechanism based on average, ration
cards and products was gradually eliminated. We have gradually shifted to the
cash-pay system and wages were paid by productivity, quality, economic
efficiency, and by market mechanisms.
In addition to the positive changes, the socialist production in the state
economy has revealed some negative changes such as:
Firstly, the efficiency of SOEs is low, according to statistics: "By 2000 the
number of enterprises with real profits accounted for 40%, the number of
enterprises with losses accounted for 20%, the rest was unstable with losses and
gain and low profits".
Secondly, there was a heavy influence of subsidy thinking. According to
Ngo Quang Minh: "The state must regularly support state-owned enterprises in the
period 1997-1999. The state budget that was invested directly for the enterprise
reached to VND 8,000 billion, of which VND 6482 billion was allocated to
enterprises, VND 1464 billion is to offset losses and support enterprises. In
addition, the state had provided a tax reduction of 2288 billion, debt cancellation
of 1088 billion, debt free of 3392 billion, debt rescheduling of 540 billion,
preferential credit loans of 8685 billion.
Summing up the reform process at this stage, the 9th Congress confirmed:
"There was some limitation of production relations that caused the limitation the
liberation and development of production forces. There has been no significant
change in the renewal and development of SOEs. "
* From 2001 to 2017
At the 9th Congress, we identified the general economic model in the
transitional period to socialism as "socialist-oriented market economy". State-
owned enterprises continue to be reform to play its key role in the economy.
Firstly, with regard to ownership relations.
Through the process of reforming, the re-arranging of SOEs, ownership of
socialist production relations in the state economy has been changed. Relevant
sectors and areas of state-owned enterprises with 100% state ownership and shares
are narrowed. According to statistics:
State-owned sectors with a 100% share of capital fell significantly from 42
in 2002 to 30 in 2004 and 19 in 2007 and 20 in 2011. The state sector holds more
than 50% Decreased from 48 in 2002 to 26 in 2004, 27 in 2007 and 27 in 2011.
This has created condition and location for the development of other
economic sectors.
 16

Equitization of businesses took place strongly.

At the conference on implementation of enterprise reorganization and
reform of enterprises in 2016-2020 on 6 December 2016, Prime Minister Nguyen
Xuan Phuc evaluated equitization that: "the majority of enterprise can make profit
after equitization. Total capital of state-owned enterprises has increased from
VND810,000 billion to VND1,234,000 billion. In fact, it is seen from the
equitization in 2015 that 350 equitized enterprises made good profits, contributed
to 49% of the pre - tax profit, increased by 27% of contribution to state budget,
increased by 72% of charter capital. The income of workers increased by 33%...
This is an example to show that the equitization process, and the re-arranging of
SOEs is very beneficial. The Prime Minister emphasized that "the task of
restructuring and reforming of state-owned enterprises is an important political
task in 2017".
Secondly, with regard to organizational and management relations
In this period, the relationship of state-owned enterprise management has
been carried out in the direction of re-organizing and re-arranging state-owned
enterprises so as to reduce the number of employees and increase the quality.
The re-arrangement reform has contributed to reduce the number of state-
owned enterprises. "In 2001, there were totally about 6,000 SOEs in the whole
country. By 2011, there were 1,369 SOEs and by the end of October 2016 there
were 718 state-owned enterprises. Basically, state-owned enterprises have focused
on key sector and areas that providing essential public-utility products and
services".
Thus, the number of state-owned enterprises has decreased by more than
eight times, leaving only large state-owned enterprises playing a pivotal role in
ensuring macroeconomic stability.
During this period, we have rearranged Corporations 90 and 91 to form 12
economic corporations. Such as Electricity Group, Petroleum Group, Chemical
Group, Coal and Mineral Group, Post and Telecommunications Group, Rubber
Group, Viettel Military Telecom Corporation, Construction Industry Group,
Shipbuilding Industry Group, Housing and Urban Group, Bao Viet Group. These
corporations play the core role of state-owned enterprises and are the basis for the
state to regulate the economy and increase the competitiveness of the enterprises
outside.
Thirdly, with regard to the distribution relations.
In this stage we have eliminated the centralized planning mechanism,
implemented salaries, bonuses and other payments under the market mechanism.
Market-based pay for salary has stimulated the interests of workers, thereby
helping to develop the production.
 17

In addition to the positive changes in the socialist production relationship in

the state sector, state-owned enterprises have also experienced negative changes:
Firstly, although the number of state ownership and state-owned enterprises
has decreased, they are still accounted for a very large share in the GDP structure
of the whole country.
The state-owned economy has been reduced but still accounted for 28.69%
of the country's GDP, there is a need to decrease this number to 15% - 20% for
other economic sectors to develop.
Secondly, many businesses suffered losses. Some economic corporations,
state-owned corporations suffered heavy losses of up to trillions of VND, causing
public outrage and government rescue such as Vinaship, Vinalie, Thai Nguyen
iron and steel expansion project, Ninh Binh fertilizer plan, Dinh Vu fiber plan, etc.
3.1.2. The status of transformation of socialist production relations is
reflected in the collective economy
* From1986 to 2001
The process of collective economy reform during this period is reflected in
the documents of the VI, VII, VIII Congress and other documents.
At this stage, the collective economy, which cooperatives is the core, had a
landmark transformation, showing that the number of cooperatives were
decreased rapidly, the cooperatives were eliminated. Alternatively, cooperative
members moved to individual business. According to the statistics of the
Coalition of Cooperatives in Vietnam, "in 1986 there were about 74,490 co-
operatives. In 1996 there were only 18,607 co-operatives and only 15,144 co-
operatives in the year 2000".
Accordingly, the number of cooperatives had decreased five times.
* From 2001 to 2017
The reform viewpoints of this period was reflected in the documents of the
Congress IX, X, XI, XII and other documents of the Party and state.
The performance of the collective economy, which is the core of the
cooperative economy in the period 2001 - now (2017), was reflected as
followings:
The revenue of the collective economy has increased. According to
statistics, "in 2010, revenue was 86,000 billion VND, 2011 was 11,679 billion
VND, in 2012 was 129,821 billion VND, in 2013 was 144,296 billion VND. 2014
was 158.964 billion”.
By transforming to the cooperative model transformation according to the
Cooperative Law 1996 and its revision in 2003 and the Newcomer Cooperative
 18

Law in 2012, the number of cooperatives have increased. According to the

statistics of the Vietnam Cooperative Alliance, "as of 31 December 2011 there
were 19500 cooperatives nationwide, an increase of 4650 cooperatives compared
to 2001, the growth rate for 2007-2011 was 31%, 13% higher than the 2002-2006
period, attracting about 13 million members and employees from small
enterprises".
However, although the revenue of collective economy has been growth year
by year, the share of the collective economy is still accounted for a small number
of the national economy, ranging from only 3.99% to 4,04% (from 2010 to 2014),
whereas the individual economy while being decreased, it is still accounted for
large share in the economy ranging from 32.07% to 31.50%. This means that
collective economy has not attracted many individual households to do business.

3.2. ISSUES OF CONCERN IN THE PROCESS OF DEVELOPMENT

SOCIAL PRODUCTION RELATIONS IN VIETNAM
Firstly, the main role of the state economy in the socialist-oriented market
economy
Secondly, the issue of new cooperatives in a socialist-oriented market
economy
Thirdly, improving the mechanisms, policies and laws of socialist
production relations in the socialist-oriented market economy.

Summary of Chapter 3

Since the reform started 1986 until now (2017), the socialist production
relations has changed significantly, contributing to the formation of a socialist-
oriented market economy in our country. Sectors and areas with 100% state capital
or with state capital dominance have been narrowed with more focusing on
important areas and sectors of the national economy. The equitization process has
taken place strongly in order to attract resources for state-owned enterprises. The
number of state-owned enterprises has rapidly decreased from 12,000 enterprises
to 718 enterprises in 2016. These are large enterprises operating in important
industries that play a role as a tool for the state to regulate the economy.
In addition to the positive changes, there are also negative changes such as
the large share of ownership in SOEs in the economy, low investment efficiency,
loss of revenue in many enterprises and weak corporate governance.
 19

There have been positive changes in the socialist production relations which
is manifested in collective economy, cooperative economy. We have transformed
the cooperative model from planning, bureaucratic, subsidizing to a market
economy based on voluntary collaboration, equality and democracy that properly
demonstrates the nature of the collective economy. The law on new form of
cooperative aimed at developing the collective economy was adopted to bring a
recovery for collective economy.
However, there are also some negative impact of our collective economy.
This economic sector has occupied a very small portion within the national
economy and has not attracted the participation of individual business households.
In order to promote the positive change and to limit its negative impact,
there should be timely solutions so that socialist production relations can play
leading role in the economy.

Chapter 4
SOME MAJOR DIRECTIONS AND SOLUTIONS
TO PROMOTE POSITIVE CHANGES AND TO LIMIT NEGATIVE
IMPACT OF SOCIALIST PRODUCTION RELATIONS
IN VIETNAM TODAY

4.1. MAJOR DIRECTION TO PROMOTE POSITIVE CHANGES, AND

TO LIMIT NEGATIVE IMPACT OF SOCIALIST PRODUCTION RELATIONS
IN VIETNAM TODAY
4.1.1. Improving the leadership role of the Party, the effectiveness of
state management in the development of socialist production relations in the
reform period
Firstly, continuing to strengthen Party's leadership role and the effectiveness
of state in improving the theoretical system of socialist production relations in our
country.
Secondly, strengthening the leadership of the Party, the effectiveness of state
management in bringing into play the positive changes of the socialist production
relations in our country today by improving the mechanism of operation between
organizations within the political system.
Thirdly, improving the effectiveness of the Party's inspection and
supervision functions and the State's management and administration capacity in
promoting positive changes, limiting negative impact of socialist production
relations in our country today.
 20

4.1.2. Developing socialist production relations on the basis of creative

application of the rules on production relations must be in line with the level
of the production force
Firstly, the development of state ownership should be reduced in terms of
quantity and increased in term of quality. The representatives of ownership in
state-owned enterprises should be focus managed by one focal point to adapt to
the mechanism of socialist oriented market economy.
Secondly, developing of a new management mechanism in a socialist-
oriented market economy. In an economy, all types of enterprises and economic
sectors should both cooperate and compete equally under the law.
Thirdly, diversifying the forms of distribution to be relevant with the level of
production force that has been currently developed.
Fourthly, focusing should be placed on key, important sectors of the
economy in order to facilitate the development of other relations and the
adjustment of macro-economy.
Fifthly, in a collective economy, it is necessary to adhere the principle of
voluntariness, equality, democracy, publicity and transparency in the admission of
members to cooperatives.
4.2. SOME MAJOR SOLUTIONS TO PROMOTE POSITIVE CHANGES
AND TO LIMIT NEGATIVE IMPACT OF SOCIALIST PRODUCTION
RELATIONS IN VIETNAM TODAY
4.2.1. Solutions on ownership
* For the ownership of socialist production relations in state economics
Firstly, state needs to identify the ownership in SOEs.
Second, state needs to reduce state ownership. State-owned enterprises
should focus on essential and important industries.
Thirdly, the State accelerates the equitization of SOEs in order to socialize
state ownership.
Fourthly, strengthening the linkages and joint ventures between SOEs and
other economic sectors to form mixed ownership.
* For socialist production relations expressed in the collective economy.
- Respecting the principle of equality, co-ownership in the cooperative.
- The distinction between two types of assets in the cooperative to avoid
overlapping between the divided and non-divided assets.
- Accelerating the promotion and education so that the people can clearly
understand their interests when joining the cooperative.
 21

4.2.2. Solutions on organization, management

In order to promote the development of socialist production relations, the
following solutions should be implemented in a synchronous manner:
* For socialist production relations in the state economy.
Firstly, the State should abolish the subsidy in State-owned enterprises.
State-owned enterprises should completely have transferred to the market
mechanism to be equal with other economic sectors.
Secondly, the state needs to clearly distinguish two types of state-owned
enterprises: SOEs operating for socio-political purposes and SOEs for profit
purposes.
Thirdly, the state should clearly define the ownership and business
management functions of state in state-owned enterprises.
Fourthly, the state should develop a good governance team in state-owned
enterprises.
* For socialist production relations in the collective economy
- Building and developing a diversified cooperative economy with various
forms ranging from low to high of which the core is the new cooperative.
- The State creates favorable conditions in all aspects and manages the
cooperative by law, mechanism, policy, finance, training of management staffs,
application of science and technology... to help the collective economy
- Strengthening the role and responsibility of the Union of Cooperatives, the
Fatherland Front, mass organizations, associations in the development of the
cooperative economy.
4.2.3. Solutions on product distribution
* For socialist production relations in the state economy
Firstly, state-owned enterprises must thoroughly adhere to the principle of
labor distribution and remove subsidy in state-owned enterprises.
Secondly, State should remove the regime of concurrent jobs, the
distribution by public servants and employees in state enterprises.
Thirdly, state-owned enterprises must diversify their forms of distribution
* For socialist production relations in the collective economy
- Income distribution in the cooperative must be based on the level of
product and service use by the members of the cooperative.
- It is necessary to allocate distribution by capital contribution to create
equity in income distribution and to encourage members contributing capital to the
cooperative.
 22

4.2.4. Improving the legal system to create the relevant legal

environment to promote the dynamism of the relevant actors in the socialist-
oriented market economy
Improving the socialist-oriented market economy mechanism to harmonize
the relations between state and the market.
Firstly, creating an equal environment between the state economy and other
economic sectors
Secondly, continuing to raise awareness about the socialist-oriented market
economy.
Thirdly, continuing to reform and improve institutions of ownership.
Fourthly, improving distribution institutions, ensuring the link between
economic growth and social progress and equality in the development of the
socialist-oriented market economy.
Fifthly, institutional improvement to enhance leadership role of the Party,
and the effectiveness and efficiency of state management in the socialist-oriented
market economy.

Summary of Chapter 4

Over the past 30 years, the reform of socialist production in our country has
made positive changes to make it become more consistent with the level of
production forces contributing to promote production in our country. However, in
addition to the positive changes, there are also negative impact that the socialist
production relations affecting the development of production forces and the
socialist orientated role in our country. In order to overcome the negative impact
and to bring into play the positive changes of socialist production relations in our
country, we have come up with some basic solutions and solutions such as: to
identity ownership in state enterprises; to step up equitization of state enterprises
in order to socialize state ownership; to abolish the subsidies in State enterprises;
and to transfer state enterprises into the market mechanism making it become
equal to other economic sectors.
State needs to develop a good management team in state-owned enterprises.
The distribution in state-owned enterprises should strictly adhere to the labor
principle which based on quality and efficiency to pay wages to managers and
employers.
For collective economy, the transformation of the cooperative model should
be accelerated on the basis of the 2012 new cooperative law which was adopted to
 23

provide effective support to the development of individual business households.

The law also develops cooperative forms in collective economics following the
principle of respecting, voluntary, equality, democracy.
The implementation of the above measures will contribute to the socialist
production relations, contributing to promote positive changes, overcome the
negative impact, enabling for the development of productions, supporting other
economic sectors to develop.

CONCLUSION

The process of mobilization and transformation of socialist production

relations in the reform period was initiated by the VIth Party Congress, which has
so far been followed by eight congresses. The mobilization and transformation of
socialist production relations in our country is divided into two main phases:
The first phase of the reform which lasted through three congresses from
1986 to 2001, was a process of exploring and experimenting on transforming of
Vietnam's economy from a planning to a multi sectors economy operating under
the market mechanism with the state management and socialist orientation.
At this stage, socialist production relations have been positively transformed
in order to adapt to new mechanisms such as: ownership was reform to focused on
key sectors of the economy, piloting equitization, terminating loss-making
enterprises, etc. The organizational and managerial relationships shall be
transferred to socialist accounting and then market mechanisms shall be organized
to rearrange state enterprises in the form: assignment, sale, contract, lease,
formation of general corporations. Distributional relations had shifted into ship
payments, from average based to job-based payment, and economic efficiency.
For the collective economy, we have broadly implemented the contracting policy
and the law of cooperatives in 1996.
From 2001 to the present is the period in which we have identified the
general economic model of the socialist-oriented market economy. Throughout the
IX, X, XI, XII Congresses, economic model was clarified and reinforced together
with the transformation of the socialist production relations to make it become a
key player within the national economy. The transformation is reflected in the
ownership that focusing more in key sectors, areas of the economy. It is used as a
tool for stabilizing macro-economic regulation, leading other economic entities,
 24

promoting equitization, separation of ownership functions with the production and

business functions.
Organizational relationships are transformed in the direction of abolishing
subsidies, forming market mechanism. Economic sectors are increasingly
equitable and cooperative following market competition. State enterprises are also
re-organized to reduce the quantity and to increase quality and forms of general
corporations. State economic groups play a key role in state enterprises.
Distributional relations shift to a market economy that pays wages by productivity,
quality, and economic efficiency, linking economic growth with social justice. In
the collective economy, we have transformed the old style of cooperatives into
new cooperatives.
However, there remain some negative impact of socialist production
relations in our country today that constitute a barrier for the development of
productive forces, making it not becoming the example for other production
relations. More particularly, many state-owned enterprises run their business
ineffectively, with prolonged losses of of trillions of VND of the state capital and
the people, causing public outrage. In management, state-owned enterprises
remain being influenced by the planning, bureaucracy and subsidize t mechanism,
lacking of a fully transferred into market mechanism.
In distribution, laborers are not subject to the principle of labor distribution.
They do not have actual power in enterprises and their salaries are low. Whereas
managerial staffs receive their salary as state employees without directly linked to
the business activities. This is the reason making them abuse of their position to
corrupt or doing, illegal business. The collective economy has been narrowed,
showing no objective, and nature. The process of transforming the cooperative
model is slow.
Therefore, the reform of the socialist production relations must be in
synchronized on all three aspects of production relations. To do this, we have
proposed solutions such as: 1) Solutions on ownership solution. 2) Solutions on
organization, management. 3) Solutions on distribution 4) Solution on improving
legal system to create the appropriate legal environment to promote the dynamism
of different subjects in a socialist-oriented market economy.
The solutions we have proposed are reference for policy makers.
 LIST OF AUTHOR’S PUBLISHCATION
RELATED TO THE THESIS

1. Nguyen Van Son (2016), "Some solutions to improve the efficiency of

state-owned enterprises in our country today", Journal of
Theoretical Education, (251), pp. 45-47.
2. Nguyen Van Son (2016), "New-style of Cooperatives in a Socialist-
Oriented Market Economy," Journal of Theoretical Education,
(242), pp.107-111.
3. Nguyen Van Son (2016), "Discussing the role of the State Economy in a
Socialist-Oriented Market Economy in Vietnam", Journal of
Economics and Management, (19), pp. 83-86.
4. Nguyen Van Son (2013), "The Marxist Socio-economic Theory of
Marxism-Leninism and its Application in Vietnam", Journal of
Science and Technology, (15), pp. 97- 99.
5. Nguyen Van Son (2013), "The role of the state economy in the spirit of the
11th Party Congress," Journal of Science and Technology, (14), pp.
74-74.
6. Nguyen Van Son (2012), "Our Party's thinking of Economic components
in Party Congress Documents," Journal of Science and Technology,
(9), pp. 67-72.