Geopolitical waves cause global supply chains to shift in Vietnam’s favor: ANZ CEO

Geopolitical shifts are causing global supply chains to shift in Vietnam’s favor given its economic resilience and deepening global integration, according to Shayne Elliott, CEO at Australia and New Zealand Banking Group Limited (ANZ).

The Southeast Asian nation has been a major beneficiary of the so-called “China +1” strategy as countries look to create flexibility and resilience in production lines outside China, the CEO wrote in a note.

Elliott stressed that Vietnam is thriving. “The growth is happening before our eyes, and I truly believe it’s on the precipice of its global economic moment.”

“After decades of promise, the excitement about Vietnam’s next chapter is justified. This is not just sentiment, it is tangible and the world needs to pay attention,” he added.

Vietnam is well positioned after striking free trade agreements at the right time and is very focused on benefiting from global capital flows.

Technology is also leading the way, as global giants including Samsung, Apple and Google invest significant capital into Vietnam. Last year, more than $20 billion in foreign direct investment flowed into the country, mainly from Japan, Singapore and China.

Vietnam had the fastest growing economy in the world last year and was one of only a few to have consecutive years of growth since the pandemic. This, year ANZ Research predicts Vietnam’s 2023 GDP growth at 4.7%.

Helping Vietnam is the fact global semiconductor sales have continued to recover and exports are starting to look up. Signs of an export recovery should lead to further improvement in the final quarter of this year, he said.

The Vietnamese government has done well to provide incentives to attract investment, including tax breaks for high-tech projects and investment in industrial zones.

It has also made regulatory changes to address concerns raised by multinationals regarding the global minimum tax due to take effect in 2024.

Most notably, Vietnam has a young, vibrant and well-educated population ready to grasp and drive this incredible opportunity. That’s a competitive advantage.

“At ANZ, we feel great optimism about Vietnam,” he noted.

ANZ was one of the first Western banks, and the first Australian Bank, to establish a presence in Vietnam in 1993. Looking ahead, the bank has a “clear strategy to support this nation’s growth well into the future.”

At a meeting with Vietnam’s Deputy Prime Minister Le Minh Khai on November 29, the CEO noted that Vietnam is one of ANZ's most important markets with promising growth potential, and his bank is supporting many high-tech manufacturers in the Southeast Asian country.