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HSBC Navigator finds positivity endures in Vietnam

Released at: 16:01, 05/11/2019

HSBC Navigator finds positivity endures in Vietnam

Photo: Viet Tuan (VET)

Latest HSBC Navigator: Now, Next and How report released.

by Ngoc Lan

HSBC polled 9,131 businesses in 35 markets and found that nearly all Vietnamese businesses (97 per cent) believe their sales will grow over the next year - significantly higher than the global and Asia-Pacific averages (79 per cent and 77 per cent, respectively) - according to the latest HSBC Navigator: Now, Next and How report.

Thirty-nine per cent of businesses in Vietnam are classified as “high-growth firms”, meaning they foresee achieving at least 15 per cent growth over the next year; nearly double the number of high-growth businesses globally. The mid-term view in Vietnam is even brighter, with 100 per cent of firms expecting sales to grow over the next five years.

Mr. Tim Evans, CEO of HSBC Vietnam, said that from an international trade perspective, Vietnam is one of the most optimistic countries globally and justifiably so. “The domestic economy is in a good place, hitting a ten-year peak of 7.1 per cent growth in 2018, and bolstered by continued strong momentum in 2019, with third quarter growth reaching 7.31 per cent,” he added. “Middle-class incomes and consumption are increasing and the manufacturing sector continues to go from strength to strength and the service sector is providing additional positive impetus to strong underlying economic growth. Vietnam remains well-poised to make substantial gains from international trade in the years ahead.”

The survey shows Vietnamese firms also see beyond the bottom line when it comes to the positive impacts of international trade. Over the next five years, 98 per cent believe it will drive innovation (compared to 80 per cent globally), while 96 per cent say it will provide new business opportunities (79 per cent globally) and 95 per cent feel it will improve efficiency (78 per cent globally).

Nearly one-third of firms surveyed (32 per cent) are already exploring digital technologies to enhance their supply chains to accelerate speed to market and to move closer to the end consumer. As a shortage in skilled labor continues to be a deterrent for foreign investors, businesses in Vietnam are improving the quality of their products and services and investing in new skills for their workforce.

Vietnamese companies are also increasingly recognizing the importance of sustainability as a factor driving the long-term viability of their business and as a way to attract and retain talent. More companies in Vietnam (28 per cent) believe their expected sales growth will be supported by making their business sustainable than any of the 35 markets surveyed in the report.

Over the last three years, businesses in Vietnam have become increasingly aware of protectionist policies across the globe. More than four-fifths (87 per cent) say governments are becoming more protective of domestic businesses, compared to 78 per cent last year and 67 per cent the year before.

However, like many companies around the world, 72 per cent of Vietnamese firms feel they are gaining more than they are losing as a result of protectionism, compared to 57 per cent globally and 56 per cent in Asia-Pacific. Only one in ten feel that they’re losing more than they gain; lower than peers globally and in Asia-Pacific (16 per cent and 17 per cent, respectively).

“Vietnamese firms are increasingly aware of how international trade will help shape the country’s future, making Vietnam more integrated into the global economy, more advanced from a technology perspective, and overall an even more dynamic economy,” Mr. Evans said.

To counter geopolitical risk and protectionism, businesses are seeking out joint ventures and taking more business online. Sourcing locally and securing supplies of raw materials and energy are also mitigating factors. “At HSBC Vietnam, we are excited to play our part in the country’s ongoing development and to help our clients grasp the wealth of opportunities so they too can thrive on the international stage,” Mr. Evans said.

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