As Western investors sour on China’s troubled economy and outlook, more of them are seeing opportunity in Vietnam. The European Chamber of Commerce in Vietnam (EuroCham) reports renewed confidence. American senior executives at the ASEAN business meeting in Hanoi this week were sanguine about their prospects in Vietnam. And an internal Vietnamese survey confirms the upbeat atmosphere.
The annual ASEAN event attracted 50% more American businesses than last year’s, reflecting the view that Vietnam’s economy has improved significantly as inflation and the exchange rate have stabilized. These businesses also are anticipating ratification of the Trans Pacific Partnership agreement expected to result in a doubling of American manufacturing in Vietnam.
An example is Boeing, which expects explosive growth in the aviation market in Southeast Asia — and is working with Vietnam Airlines to capitalize on it.
EuroCham just announced a survey found nearly half of its members believe the business environment in Vietnam has “remarkably improved” — up from 38% at the end of 2013. Moreover, 78% of EuroCham respondents say they expect to increase investments in Vietnam, compared to 41% a few months ago. That’s partly because they now expect Vietnam’s inflation rate to be below 4%.
The EuroCham survey is an important indicator of future economic activity in Vietnam because of its sheer size; it represents 750 European businesses, including some of the world’s largest corporations.
Another survey, this one of 3,000 Vietnamese enterprises, also finds optimism, with 82% reporting their 2013 revenue was higher than that in 2012 — and 86% expect another increase in revenue in 2014. Among Vietnamese companies, the most optimistic are mineral, petroleum, steel and construction material firms.
American businesses and investors have been slow to catch on to the Vietnam opportunity. Meanwhile, upbeat reports like these help explain why Vietnam’s stock exchanges are on top of world markets so far this year.