Vietnam businesses look on bright side of international trade: HSBC survey

06-Nov-2018 Intellasia | The Saigon Times | 6:00 AM Print This Post

Vietnamese businesses are among the world’s most optimistic over international trade prospects, and they are also among the most confident when it comes to succeeding in the current environment, according to HSBC’s latest report released on November 1.

The report, called, “Navigator: Now, next and how for business,” was written on behalf of the bank by Kantar TNS. It was compiled from responses by decision-makers at more than 8,650 businesses from small and mid-market to large corporations across a broad range of industry sectors in 34 markets, with 200 businesses surveyed in Vietnam, between July and September 2018.

The Vietnamese economy continues to be one of Asia’s top performers, with manufacturing growth currently at double digits on a yearly basis and the services sector also posting solid gains, according to the report.

While momentum is likely to ease amid cooling Chinese demand and increased global trade protectionism, export growth is forecast to outpace most of the region. Meanwhile, the domestic economy should further benefit from increased tourism and improving labour market conditions.

As many as 91 percent of Vietnamese respondents, compared with 75 percent globally, indicated they believe the outlook for trade is favourable in spite of geopolitical factors that are curbing enthusiasm elsewhere.

They cite a favourable economic environment; decreasing costs of shipping, logistics and storage; and an increasing demand for their products as the top three drivers of trade growth.

This bullishness is also reflected in the confidence of Vietnamese firms, with 91 percent believing they will succeed in the current environment, compared with 81 percent of businesses globally. Consumer confidence, commodity prices and global economic growth are the top factors for their positive outlook.

Market expansion opportunities

Although Vietnamese firms are optimistic about the global backdrop and trade opportunities, almost four out of five firms (78 percent) expressed the belief that foreign governments are becoming more protectionist, considerably higher than the global benchmark (63 percent) and an 11-percentage point increase from HSBC’s last Navigator survey, conducted in late 2017.

Nonetheless, firms do not appear to view rising global trade protectionism as having severe repercussions, at least to date.

“Vietnamese businesses’ optimism reflects an economy that has been one of Asia’s star performers and is growing fast,” remarked Winfield Wong, Head of Wholesale Banking, HSBC Vietnam. “They are optimistic as they consider themselves well-positioned thanks to a strong domestic economy, confidence in the global economy, far-reaching trade deals and burgeoning trade relations with major markets.”

Only 19 percent of respondents viewed the US-China trade friction as likely to be a hindrance to their businesses over the next three years. In part, this could reflect the prospective boost to exports in sectors such as textiles and electronics, as production and demand shifts away from China.

Meanwhile, the majority of Vietnamese respondents are positive about the partnerships established with key trading partners, with 69 percent believing that Asean membership will help their businesses over the next three years.

Similarly, 65 percent of Vietnamese firms believe the forthcoming European Union-Vietnam free trade agreement will have a positive impact on their businesses in the near future.

Vietnamese businesses are also looking beyond these agreements for growth. Over a quarter of businesses are eyeing opportunities in Japan, while 23 percent are looking to expand into China, and a fifth are considering South Korea for expansion.

These respondents generally have a positive view of regulations, with 45 percent of respondents stating that these increase the value of their businesses and the same proportion believing that it enhances their international competitiveness. On the other hand, 22 percent of respondents reported that complex approval systems make it harder to do business.

https://english.thesaigontimes.vn/63845/vietnam-businesses-look-on-bright-side-of-int percentE2 percent80 percent99l-trade-hsbc-survey.html

 


Category: Economy, Vietnam

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