Vietnam keeps being an attractive investment environment for global investors, with many Indian and Chinese enterprises saying they plan to expand their business in the Southeast Asian country in the next two years, according to an HSBC survey.
The UK-based HSBC Holdings plc (HSBC), one of the largest banking and financial services institutions in the world, has recently released the results of a large survey of nearly 1,600 companies from six of the world’s largest economies all of which have operations in Southeast Asia.
The survey, ‘HSBC Navigator: Southeast Asia (SEA) in Focus,’ covered 1,596 companies from the U.S., the UK, China, France, Germany, and India.
Survey respondents were key decision-makers from companies already doing business in SEA or those considering doing so.
These international businesses have strong expectations for continued growth in SEA, including Vietnam, which “has been striding forward in recognition and application of the sustainability agenda.”
About 21 percent and 26 percent of Indian and Chinese firms operating or intending to operate in SEA, respectively, said they plan to expand their business in Vietnam in the next two years.
In respect of Vietnam’s advantages, three out of ten businesses pointed to a skilled workforce, while 27 percent cited competitive wages and proven economic resilience in response to the COVID-19 pandemic.
Forty-nine percent of the Indian companies surveyed said they were enthusiastic about Vietnam’s supportive government and regulatory environment, while the corresponding rates of the American and Chinese firms are 33 percent and 30 percent.
Encouraged by Vietnam’s regulatory environment, 36 percent of the American companies in the poll said that they were keen on opportunities to develop and test new products and solutions in the market.
Meanwhile, 39 percent of the Indian companies stated they were attracted by Vietnam’s infrastructure.
Notably, 49 percent of the firms polled, mostly from China, India, and the U.S., expressed their hope to make use of the EU - Vietnam Free Trade Agreement (EVFTA) to further promote their trade operations in the region.
Being attracted by the supply chain ease and social and political stability of Vietnam, a quarter of the German respondents selected both as positive features of the Vietnamese market.
“Vietnam has been striding forward in recognition and application of the sustainability agenda to become a regional leader in its progress toward achieving the 17 United Nations Sustainable Development Goals (SDG),” HSBC said in the survey.
Ranked 51st out of 162 countries by the SDG Index, Vietnam is thus rated as having greater success than all other Southeast Asian countries barring Thailand, according to the poll.
However, some 31 percent of the respondent enterprises operating in Vietnam worried that new regulations and rules on carbon reduction could impact them, while 36 percent flagged the difficulty in hiring employees who possessed the correct sustainability credentials and knowledge.
Vietnam’s GDP growth is expected to make an impressive recovery over the course of 2022, likely reaching a 6.2 percent progression following a 2021 low of 2.6 percent, HSBC forecast.
The country is rising as a global production hub thanks to the incentives given by the government, especially in the signing of free trade agreements, HSBC Vietnam CEO Tims Evans said.