German firms intend to expand investment in Vietnam
Fifty-five percent of German businesses, when asked, have said they want to increase investment capital in Vietnam, higher than the rate for Southeast Asia (44 percent), according to a survey conducted by the German Industry and Commerce Vietnam (GIC) in April.
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| The AHK World Business Outlook 2019 was announced at a press conference in Hanoi on June 20 (Source: tapchihuongviet.eu) |
German enterprises stayed optimistic about their performance in Vietnam as well as growth prospects for 2020 despite global economic crisis and escalating trade tensions, according to the survey.
Specifically, 77 percent of German businesses assessed their business situation in 2019 as good. Last year, only 56 percent had a positive view of their performance. This result is much higher than the average rate of Southeast Asian nations – 61 percent.
2018 was evaluated as a successful year of Vietnam’s economy with a GDP growth of 7.1 percent. The foreign direct investment (FDI) reached 13 billion USD while the import-export turnover hit a record of 465 billion USD, with a trade surplus of over 7 billion USD.
The Vietnamese Government is willing to support foreign investors to do business in the country.
Vietnam’s participation in a number of free trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA) is a favourable factor to boost the country’s economy.
The survey also showed that compared to other Southeast Asian countries, Vietnam received more special attention from German businesses.
Fifty-nine percent of German investors in Vietnam plan to hire more workers in 2019-2020 to serve the expansion of their business.
The conclusion of negotiations for the EVFTA is expected by German businesses to help improve the legal framework and economic policies in Vietnam.
However, they also pointed to some factors that might pose challenges to their development such as economic policies, lack of high-quality labour, increasing personnel costs, and trade barriers.
Chief representative of the GIC in Vietnam Marko Walde said the country is one of the Southeast Asian nations that German businesses have selected to land investment.
A majority of German businesses having factories in Vietnam had intention to increase investment capital in Vietnam, he added.
