Vietnam an attractive destination for investors to diversify global presence

Vietnam has become an attractive destination for foreign investors thanks to the country's rapid economic growth, competitive wages, sizable and well-educated workforce, and infrastructure development, a forum heard.

Investing in the Southeast Asian country allows German companies to reduce their reliance on other regions, said Ingo Brandenburg, a German Business Association (GBA) board member.

Brandenburg was speaking on Thursday at the first “Beyond Global Business Promotion and Connection” forum held in Thu Duc city, Ho Chi Minh City. The Vietnam International Trade and Investment Development Club (VITD), the main organizer, said it plans to make the forum an annual event.

Brandenburg noted that Vietnam’s commitment to green growth and decarbonization also offers new opportunities for German investors to share their expertise and contribute to sustainable development.

More than 700 German enterprises have established operations in Vietnam, creating about 100,000 jobs and investing over $10 billion directly and indirectly. This makes Germany one of the largest investors in Vietnam.

"Today, GBA has 400 members, a reflection of the opportunities and dynamics of the Vietnamese market," Brandenburg added.

Firdaus Othman, consul general of Malaysia, noted at the event that Vietnam's business landscape is characterised by rapid growth of 6-7% annual GDP over the last decade. Based on Malaysia’s data, Vietnam recorded 8% growth in 2022, and rebounded strongly from the economic disruption caused by the Covid-19 pandemic during the second half of 2021.

"Looking ahead, Vietnam's sustained growth is anticipated, driven by factors such as competitive manufacturing wages relative to China's coastal provinces; a sizable, well-educated workforce; increased capital expenditure, notably in infrastructure; and the ongoing shift in manufacturing supply chains from China.

"The country's economic trajectory remains promising, yet it also highlights the need for critical power infrastructure development to meet increasing electricity demands, estimated at $133 billion by 2030. These factors position Vietnam as a promising destination for manufacturing and economic growth in the coming years," Othman commented.

According to Othman, total trade figures for January to October 2023 between Vietnam and Malaysia stand at $14.34 billion, a notable comparison to last year's $16.50 billion during the same period. Delving deeper, Malaysia's exports to Vietnam from January to October 2023 were recorded at $9.23 billion, while imports stood at $5.11 billion.

"These figures signify the evolving dynamics in our trade relations, reflecting a landscape ripe with opportunities for further collaboration and growth," he said.

"Throughout 2023, we have actively engaged with numerous companies in Vietnam across a spectrum of sectors, including F&B, chemicals, oleochemicals, IT products and services, machinery and equipment, as well as oil and gas," Othman added.

According to him, one of Malaysia's key strengths lies in the credibility of its Halal certification, acknowledged and accepted across almost all Halal markets worldwide. The growing awareness of Halal products and services among producers and global consumers offers a competitive advantage to our companies for exporting Halal products from the ASEAN region.

Moving forward, Othman invited Vietnamese companies to participate in MIHAS 2024, scheduled from September 17 to 20, 2024. MIHAS serves as a premier platform for Vietnamese companies to integrate into the global Halal supply chain and explore untapped opportunities.

The forum was co-organized by German Business Association in Vietnam (GBA), Polish Trade and Investment Promotion Office in Vietnam, Malaysia External Trade Development Corporation (MATRADE), Malaysia Business Chamber Vietnam (MBC), and Singapore Chamber of Commerce in Vietnam.