Standard Chartered forecasts Vietnam’s 2023 GDP growth at 7.2%

Standard Chartered Bank forecasts Vietnam’s economic growth at 7.2% in 2023 and 6.7% in 2024, following a solid recovery to 8.0% in 2022.

The forecast is highlighted in the bank’s recently published global research report on Vietnam, titled “Vietnam – Still enjoying high-growth status”.

“We still have a conviction on Vietnam’s high growth potential over the medium term,” said Tim Leelahaphan, Economist for Thailand and Vietnam, Standard Chartered. “While macro indicators moderated somewhat in Quarter 4 2022, they remain largely robust. Retail sales posted solid growth in the second half of 2022, implying improved domestic activity.”

According to Standard Chartered’s economists, trade balance has tentatively improved; exports may face global headwinds; imports are at risk of reversal. FDI disbursements have continued to increase, but the outlook hinges on the global economy. Inflation may pose a threat to Vietnam’s continued recovery.

Inflation is anticipated to rise throughout 2023, potentially reaching 6% in the final months of the year and averaging 5.5% in both 2023 and 2024 (from 3.2% in 2022). Vietnam’s fiscal deficit may persist and be a source of inflation.

Standard Chartered Bank expects the State Bank of Vietnam (SBV) to hike rates by another one% in Quarter 1 2023 and to stay on hold through end-2024 as it shifts to a tightening stance with a view to maintaining stability.

“We expect the central bank to stay vigilant against inflation, a weakening Vietnamese dong, and financial instability arising from risky loans in the real-estate sector. The SBV may prefer a relatively strong Vietnamese dong, as long as it does not harm the country’s trade competitiveness,” said Tim Leelahaphan, Economist for Thailand and Vietnam, Standard Chartered.

According to Tim, the Vietnamese dong has recovered sharply in recent weeks, however, the pace of Vietnamese dong appreciation is likely to slow down, as several headwinds persist. The replenishment of FX reserves is likely to be a key priority for the central bank. An improving Current Account backdrop and tourism recovery is likely to be supportive to the Vietnamese dong. The USD/VND exchange rate is forecast at 23,400 by end-2023 and 23,000 by end-2024.

Drugstore chains continue growth momentum

Leading players in the pharmaceutical retail market, including FPT Retail, An Khang, and Pharmacity, are ramping up expansion efforts, giving birth to the modern pharmacy model.

2022 was a bonanza year for FPT Retail as the company reached the 1,000 Long Chau pharmacy mark early last month, securing a bigger piece of the pie in a market that is enjoying such robust growth.

According to Nguyen Bach Diep, chairman and CEO of FPT Long Chau, achieving the 1,000-store system and a presence in 63 localities throughout the country in such a short time marks a major milestone for the company, surpassing 125 per cent of its expansion plan for 2022.

The three leading pharmacy chains aim to scale up their drugstores to about 10,000 units by 2025.
Last year, the Long Chau pharmacy chain generated $285.3 million in total revenue, equalling a 2.6-fold jump on-year.

Over the next five years, FPT Retail aims to boost the number of Long Chau pharmacies to 3,000, with 600 outlets being launched this year.

Meanwhile, the An Khang pharmacy chain, operated and managed by Mobile World Group – Vietnam’s largest consumer electronics retailer – currently consists of 529 outlets.

Despite slower growth compared to its rivals, An Khang also shows strong potential and has caved a spot among Vietnam’s top three pharmaceutical retailers, behind Long Chau and Pharmacity.

For its part, Pharmacity, belonging to Pharmacity JSC which is owned by Mekong Capital – a large Vietnam-focused private equity firm – has opened nearly 1,100 drugstores and eyed double-digit growth in the past years.

The three pharmacy chains aim to scale up their drugstores to about 10,000 units by 2025.

According to global market research organisation IQVIA, modern pharmacies will swell in number in the years to come and are striving to diversify their offerings to also include personal care products and cosmetics, complementing their revenue and profit figures.

Business opportunities for modern pharmacies are deemed considerable according to the World Bank forecast. The proportion of people aged 65 and above in Vietnam will have more than doubled by 2040, accounting for 18 per cent of the total population. This is likely to lead to increased demand and create growth space for retail pharmacies.

Workers’ average income in 2022 surges

The average monthly income of Vietnamese employees in 2022 hit VND6.7 million (nearly US$286), an increase of VND927,000 (US$40) compared to the previous year, reported the General Statistics Office on Tuesday.

Specifically, male and female workers' average monthly income stood at VND7.6 million (US$324) and VND5.6 million (US$239), respectively, up VND950,000 (US$40) and VND914,000 (US$39) from 2021. 

The average incomes of laborers in the processing-manufacturing, service and agro-aquatic-forestry sectors respectively climbed up 17.6 percent, 15.4 percent and 9.8 percent. 

The number of employees aged 15 year and over in 2022 was 50.6 million people, an increase of 1.5 million people compared to the previous year.

Of the figure, 19.7 million worked in the service sector while 17 million and 13.9 million worked in the industry-construction and agro-aquatic-forestry sectors, respectively. 

Vietnam emerging as RoK’s major importer of powdered milk

Vietnam is emerging as a major importer of powdered milk from the Republic of Korea (RoK) that is facing low birth rate.

Specifically, the RoK exported 15.85 million USD worth of powdered milk to Vietnam as of the last November, or 17% of its total shipment of this product.

Data from the Korean Customs Service showed that the RoK earned 95.86 million USD from the export of powdered milk during January-November. Notably, its shipment to Vietnam soared to 19.54 million USD in 2021 from 7.58 million USD in 2016. It is estimated that its powdered milk export revenue will surpass 100 million USD this year, including over 20 million USD from Vietnam for the first time.

Lotte Confectionery, which merged with Lotte Food in July 2022, is expanding its formula milk business in Vietnam with such brands as Nubone, Lotte Kid A and Grand Noble that debuted in 2019.

Thanks to increased marketing via television and social media, the company's export to Vietnam doubled in 2022 from a year ago.

Korean dairy manufacturer Namyang Dairy Products is also stepping up the export of powdered milk such as Imperial XO and maintaining its reputation in Vietnam.

Finance Ministry creates favourable conditions for FDI companies: Minister

Vietnam’s Finance Ministry will continue to create favourable conditions for foreign direct investment (FDI) companies to operate effectively and sustainably in the country, Finance Minister Ho Duc Phoc said on January 10 when meeting Samsung Electronics President and Chief Financial Officer Park Hark-kyu.

At the meeting, Phoc said that Samsung Electronics is the biggest investor of the Republic of Korea (RoK) in Vietnam, which has greatly contributed to the country’s export revenue, job creation, and state budget.

The ministry will continue to accompany the company, solve difficulties and create favourable conditions for its projects in Vietnam, the minister affirmed.

Park said that in 2008, Samsung officially invested in Vietnam’s Bac Ninh province, and in 2012, it expanded operations and built a factory in Thai Nguyen province. It also built a household appliance factory in Ho Chi Minh city.

He emphasised that Vietnam is an important partner and the largest production "base" in the world of the Samsung Group. Even during the COVID-19 pandemic, its factories in Vietnam still maintained stable operations, providing jobs for more than 110,000 local workers.

In 2022, despite uncertainties in the world situation, thanks to the support of the Government of Vietnam, the group still met its revenue growth target, Park said, noting that Samsung Group hopes the Vietnamese Government will continue to accompany and help it to further develop.

He said he believes that Samsung's subsidiaries and other global businesses will continue to expand their investments in Vietnam.

RoK tourists favour Vietnam for Lunar New Year Festival: tour operators

Vietnam is still a favourite tourist destination for Republic of Korea travellers on the upcoming Seollal or Korean Lunar New Year - a holiday and celebration which marks the first day of the Korean Lunar Calendar.

This year, Seollal falls on January 22.

Data from travel agencies in the Republic of Korea shows that the demand for overseas travel of people in the country during the Seollal is high even though the holiday only lasts four days. 

As of the beginning of January 2023, travel agencies sold out 80% of the total air tickets that they prepare for the holiday.

Favourite destinations selected by Korean travellers include Japan, Vietnam, and some other Southeast Asian countries.

An official of Korea’s travel agency MODETOUR said that it sold out about 87% of tickets departing during the Lunar New Year festival, of which tickets to Japan’s Osaka sold out the fastest.

Hanjin Travel also confirmed that all tickets for charter flights to Japan’s Kagoshima province departing during the holiday this year were sold out.

Due to the short holiday period, tourist destinations near Korea such as Japan and Southeast Asian countries are very popular. 

According to Hana Tour Company, as of January 9, its tours starting from January 20 to 24 were booked with 54% to Southeast Asia, 30% to Japan, and 7% to Europe. 

Specifically, in Southeast Asia, 36% of its clients choose Vietnam, 17% choose Thailand, 12% choose the Philippines and 7% choose Taiwan (China).

The RoK tourism industry considers these very positive signs of recovery since the outbreak of the COVID-19 pandemic in early 2020.

A survey by major tour operators in the country shows that more than 80% of products that they planned to offer during the lunar new year holiday have been welcomed by customers.

An official from Lotte Tour said that so far all of its plans are still in progress without any changes or problems. Compared to three years ago, this is the recovery starting from zero to 100.

Vietnam looks to boost trade with China’s special administrative region

A workshop discussing measures to promote business cooperation between Vietnam and the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) of China was held in Hanoi on January 10. 

The event was jointly organised by the Foreign Investment Agency (FIA) of the Ministry of Planning and Investment (MPI), the Chinese General Chamber of Commerce (CGCC), the GBA Union, and the Hong Kong - Vietnam Chamber of Commerce (HKVCC) . 

It focused on introducing Hong Kong's recent development, and Vietnam's investment environment and incentives, aiming to call on Hong Kong enterprises to increase their investment in Vietnam. 

In his opening speech, Deputy Minister of Planning and Investment Tran Duy Dong highlighted the significance of the workshop as offering a chance for the two sides to share new investment and trade trends and solutions to improve Vietnam's investment environment, and presenting an opportunity to propose measures to better the efficiency of cooperation between the two sides.

The MPI will always create favourable conditions for foreign investors, including those from Hong Kong, to invest and do business effectively in Vietnam, he said. 

The official expressed the hope that the economic relations between Vietnam and Hong Kong will develop to new heights, towards prosperity and sustainable development of their business community. 

Jonathan Choi, Chairman of the CGCC, HKVCC, and Union, said cultural and geographical proximity also facilitates cooperation between Vietnam, Hong Kong and the Hong Kong – Guangdong - Macau region in many fields, especially trade, investment and tourism.

There will be ample room for bilateral cooperation, especially in the fields of farm produce, financial services, technology and innovation, he stressed. 

On the occasion, the FIA inked a memorandum of understanding on cooperation in trade and investment promotion with the CGCC, GBA Union and HKVCC.

According to the MPI, the trade and investment cooperation between Vietnam and Hong Kong has greatly contributed to strengthening bilateral economic relations.

Vietnam is Hong Kong's eighth largest trading partner. In 2021, the two-way trade reached 13.5 billion USD. By November 2022, Vietnam raked in 10 billion USD from exporting goods to Hong Kong, while spending 1.78 billion USD on importing from it. 

Meanwhile, Hong Hong remains the fifth largest foreign investor in Vietnam with 2,164 projects worth nearly 29.5 billion USD, mainly in processing, manufacturing, real estate, production and distribution of electricity, gas, and water.

Seafood sector striving to expand export market

As the markets are affected by economic fluctuations, many Vietnamese seafood enterprises have flexibly changed their strategy and boosted exports to niche markets.

Vietnam’s seafood exports reached a record $11 billion in 2022, up 24 per cent on-year and 22 per cent higher than the year's target of $9 billion. Besides traditional markets such as the US, Europe, and China, Vietnam’s seafood exporters have been entering other potential markets.

Notably, seafood exports to Australia grew impressively in 2022 with an increase of 42.64 per cent after 11 months compared to the same period in 2021, reaching a turnover of more than $331 million. In particular, the position of Vietnamese shrimp products in this market has been confirmed.

According to a representative of the Vietnam Association of Seafood Exporters and Producers (VASEP), as of December 2022, shrimp exports to Australia reached nearly $214 million, up an impressive 62 per cent over the same period in 2021.

The Philippines is another potential market for the seafood industry with more than 100 Vietnamese enterprises exporting seafood products there. Currently, the Philippines has risen to become the 13th largest single import market for Vietnamese seafood, up 10 places compared to 2020.

Nguyen Xuan Thang, head of the Import-Export Management Department under Ho Chi Minh City Department of Industry and Trade, said that in order to expand exports, businesses need to continue to strengthen the available markets and diversify, especially eyeing those with free trade agreements. Enterprises also need to fully participate in the global value chain to improve their production and export capacity.

VinFast delivers over 4,000 electric cars in December

The VinFast Trading and Service Limited Liability Company, a subsidiary automaker of Vietnamese conglomerate Vingroup, handed over 4,278 electric vehicles (EVs) to its customers last December, seven times higher than that of the previous month.

Of the sum, there were 2,730 VF 8 and 1,548 VF e34 units.

On December 12, the company’s VF 5 Plus model was officially opened for booking, receiving 3,293 orders within just nine hours. The EVs will be delivered to their owners starting April 2023.

Retail market predicted to bustle in 2023

Although 2023 is forecast to see many difficulties, experts expect this is a recovery year of the retail sector after COVID-19 pandemic as there are many signs showing the return of investors and higher demands.

According to the Ministry of Industry and Trade (MoIT), the scale of the Vietnamese retail market is 142 billion USD, which is expected to reach 350 billion USD in 2025, with contributions of 59% to total GDP.

Last year, the total revenue from retail sales of goods and services rose 21%, exceeding the target of 8%.

A survey by Vietnam Report showed that over 53.8% of total retail firms enjoyed similar and higher business results compared to the pre-pandemic level.

Experts held that growth of retail sales is being supported by rise in income and the strong recovery of the tourism sector as well as relevant sectors such as transport and accommodations, as well as the effectiveness of inflation control measures.

Particularly, from now to the Lunar New Year (Tet) Festival, which falls in late January, consumers are predicted to loosen their wallet dramatically.

At the same time, there are signs of vibrant retail activities as many foreign investors have announced their plans to return after COVID-19.

Recently, Thailand’s Central Retail said that it will pump additional 20 trillion VND (852.87 million USD) into the Vietnamese market in the next five years, pushing its investments in Vietnam in the 2022-2026 period to 65 trillion VND. With this plan, Central Retail will raise their coverage from 40 localities currently to 55.

Meanwhile, Japanese giant retailer Aeon Group plans to build another megamall in Hanoi, raising its total trade centres in Vietnam to 20.

Phung Trung Kien, Founder of Vietnam Holdings Inc., said that retail businesses will see good growth in early 2023, especially those trading consumer goods thanks to the Lunar New Year Festival.

In 2023, four trade centres are scheduled to be launched - Central Premium plaza, Vincom Megamall Grand Park, Sunrise City Central and Emart 2 with total area of over 116,000 sq.m.

Many experts predicted that this year, retailers will expand their selling channels, bringing their products to different trading platforms to optimise online retail channels.

Vietnam produces trade surplus of US$12.4 billion in 2022

Vietnam enjoyed a trade surplus of US$12.4 billion last year, marking the seventh consecutive year that the country's export turnover stood at a higher rate compared to its import revenue.

According to the latest statistics compiled by the General Department of Vietnam Customs on January 10, 2022 saw import-export turnover reach US$730.2 billion, up 9.1% year on year, with US$506.83 billion coming from the foreign-invested sector, up 9.3%.

Throughout the 12-month-period export revenue brought in US$371.30 billion, up 10.5% year on year, and import revenue rose 7.8% to US$358.9 billion.

A total of 36 commodities raked in more than US$1 billion each in export revenue, accounting for 94% of the total, in which eight products posted over US$10 billion each, making up 70.1%.

Meanwhile, 46 products saw import value rise to over US$1 billion each, whilst six exceeded the US$10 billion mark, making up 93.3% and 52.1% of the total, respectively.

2023 Vietnam economic scenarios forum slated for Jan. 11

Scenarios for the Vietnamese economy will be examined at a forum to be jointly held in Hanoi on January 11 by Vietnam Economic Times and the Ministry of Foreign Affairs.

The event will bring together delegates from various ministries and State agencies, including the Party Central Committee’s Economic Commission, the Economic Committee of the National Assembly, and a number of ministries in charge of foreign affairs, planning and investment, finance, agriculture and rural development, industry and trade, labour, construction, the State Bank, the Vietnam Chamber of Commerce and Industry, and business associations.

Keynote speakers will come from the Asian Development Bank (ADB), the Bank for Investment and Development of Vietnam (BIDV), the State Bank of Vietnam, the Ministry of Finance, and other financial institutions and State agencies.

Vietnam's green startups show growth

Green startups show strong growth in the Vietnamese market as sustainable development projects draw the attention of several venture capitalist funds.

Private funding for climate technology companies in Southeast Asia exceeded $1 billion in the first 11 months of 2022, according to a report from Deal Street Asia last month.

This is the first time that climate tech startups, defined as those focused on reducing greenhouse gas emissions or addressing the impact of climate change, have raised more than a billion dollars in a single year. This marks a significant increase on the $607 million raised by climate tech startups for the whole of 2021.

Startups focusing on green businesses are attracting the attention of venture capital funds. Gibs Song, director of VSV Capital, said the fund has invested in more than 80 startups since its establishment in Vietnam in 2014.

Besides investing in financial, educational, and medical solutions, VSV Capital is also particularly interested in the green sector with areas such as battery recycling, solar cells, bioplastics, nano-cellulose fibres, and e-vehicles. The fund recognises the urgency of environmental protection and the replacement of non-renewable energy sources.

Vietnam-based electric motorbike startup Dat Bike announced an $8 million round of fundraising in November that had been led by Singapore-based Jungle Ventures, with participation from several other funds. So far, Dat Bike has raised a total amount of $16.5 million.

Also in November, VECA, Vietnam's first mobile application for buying and selling scrap, launched a partnership with Tetra Pak to expand their used beverage carton collection drive to 18 districts in Ho Chi Minh City.

Marina Tran Vu, founder and CEO of EQUO, a Vietnam-based sustainability startup that provides fully plastic-free and compostable solutions made of materials like coffee, coconut, and sugarcane to replace single-use plastics, said that businesses do not see sustainable development as a trend, but as a real need of the market.

Viet Nam gears up to welcome Chinese tourists

Vietnam needs to gear up to welcome Chinese tourists, focusing on improving service quality and strengthening promotion activities, according to tourism experts at a seminar held on Monday in Quảng Ninh Province.

The seminar, named “Measures to attract Chinese tourists to Việt Nam”, was held by the Vietnam National Administration of Tourism, the Vietnam Tourism Association and Quảng Ninh’s Province’s People’s Committee.

Chairman of the Việt Nam Tourism Association Vũ Thế Bình said the first thing the tourism sector should do is implement measures to attract Chinese tourists as well as improve the quality of services to create a good impression on them, which helps to develop this important market in a sustainable way.

President of the Việt Nam Travel Association's Union Cao Trí Dũng said it is important to resume regular flights and charter flights to attract tourists to localities such as Đà Nẵng, Khánh Hoà and Phú Quốc.

He suggested that Việt Nam strengthen the promotion of destinations in localities which have direct flights from China or are close to China in proximity.

Việt Nam’s travel companies should also offer a variety of tourism products at different prices to different market segments.

Service providers, accommodation, restaurants and shopping malls need to get ready in terms of staff and facilities to welcome tourists, ensuring that they compete with each other with quality of service and avoid selling services or products at prices lower than those in the market.

There needs to be smooth cooperation from relevant ministries and agencies with localities, airlines and travel companies in promoting destinations.

The image and content promoted must be impressive and show the outstanding features of Việt Nam as a safe, hospitable and exciting destination for all Chinese tourists as well as change the position of Việt Nam as a cheap destination.

China is Việt Nam’s largest tourism market with 5.8 million visitors to the country in 2019, accounting for nearly one-third of international arrivals.

Meanwhile, about 4.5 million Vietnamese people also travel to China a year, making this the leading outbound destination of locals. In 2022, Việt Nam received only 3.5 million international visitors, accounting for only 70 per cent of the target of 5 million. It served 101 million domestic visitors, up 19 per cent from 2019, the pre-pandemic year. 

Bright outlook for livestock farming industry
     
The outlook for the livestock farming industry is bright in 2023 despite its lower-than-expected earnings in 2022.

Listed firms in the industry had a tough year dealing with the mounting fuel prices caused by the Russian-Ukrainian conflict.

Higher fuel prices drove up transport costs, which, in turn, passed on to higher animal feed prices. As animal feed is an important input to animal agriculture, its rising prices added to their bills, driving down their profits.

Specifically, their aggregate net profits in the first nine months of 2022 fell by 6.2 per cent year-by-year. Their aggregate revenues were harder hit, witnessing a fall of 31 per cent.

The situation began to turn around in Q3/2022 as the demand for meats rose. The rise in sales was large enough to offset the rise in costs, resulting in higher profits.

Hoang Anh Gia Lai JSC (HOSE: HAG) was taking the lead in terms of financial performance during the period. It made a revenue of VND1.4 trillion (US$61.4 million), up 160 per cent year-by-year. Its net profit stood at VND369.5 billion, increasing seventeen-fold against last year.

BAF Vietnam Agriculture JSC (HOSE: BAF) came next with a revenue of VND1.9 trillion. Its net profit hit VND158 billion, up 260 per cent year-on-year. Dabaco Group (HOSE: DBC) followed suit with a revenue of VND3.6 trillion, up 33 per cent, and a net profit of VND206 billion, up 49.5 per cent.

Vietnam Livestock Corporation JSC (UPCOM: VLC) also did well in Q3/2022. It raked in VND78.3 billion in net profit, up 10.59 per cent. Vissan JSC (UPCOM: VSN), likewise, posted a net profit of VND31 billion.

Masan MeatLife Corporation (UPCOM: MML) was the only firm operating in the industry running unprofitably in Q3/2022. It made a net loss of VND98 billion due to a nosedive in animal feed sales.

The securities firm VnDirect has an optimistic outlook for the industry. It forecast that firms would be riding high on the back of higher pork prices and growing meat demand in 2023.

Specifically, pork prices are expected to rise by 5.0 per cent during the period as a result of a tight pork supply. Accounting for 60 per cent of the national pork output, household swine farms were reluctant to raise new hogs amid the high animal feed prices, causing the shortage.

The same goes for meat demand, which is expected to remain high thanks to the governmental wage-rising scheme in mid-2023 and the full recovery of tourism in the late months of the year.

VnDirect estimated that basic wage rates would increase by 20.8 per cent in July. Additionally, the number of foreign tourists to Viet Nam would recover to 84 per cent of its pre-pandemic levels in Q2 and 100 per cent in Q4. These two favourable factors would give a huge boost to firms' revenues.

HCM City received US$6.8 billion in remittances last year
     
HCM City received US$6.8 billion in remittances last year, a slight decrease compared to 2021 but still accounting for 48 per cent of foreign currency deposits at its credit institutions.

According to Nguyen Duc Lenh, Vice Director of the HCM City branch of the State Bank of Vietnam (SBV), although the amount is lower than that of 2021, it is still a good result.

This cash flow has contributed to generating foreign currency revenue, stabilising exchange rates, and spurring economic growth.

According to statistics of the State Commission for Overseas Vietnamese Affairs (SCOV), there are currently more than 5.3 million Vietnamese living and working in 130 countries and territories across the world, and among this group, more than two million people are from or have connections to HCM City.

In addition, the city has more than 3,000 businesses invested in by expatriates, with combined capital of VND45 trillion (US$1.9 billion).

Vietnam attractive destination for foreign manufacturing

Vietnam has witnessed an increasing wave of foreign companies shifting production to the country in the past year, and growth in the area is expected to continue.

Samsung Vietnam opened the largest new R&D Center in Southeast Asia in the presence of Prime Minister Pham Minh Chinh in the Tay Ho Tay urban area, Hanoi, last month.

Nikkei Asia in December reported that Apple plans to move some MacBook production to Vietnam for the first time next year as the US tech group continues diversifying its production base away from China amid escalating tech tensions between Washington and Beijing.

On December 8, 2022, Lego Group signed an MoU with Vietnam Singapore Industrial Park (VSIP) to build a new factory in Binh Duong province. The project has the total investment of more than $1 billion, is expected to be deployed in the second half of 2022, and put in operation in 2024, creating about 4,000 jobs.

Vietnam has witnessed an increasing wave of foreign companies shifting production in our country in the past year, which is expected to rise.

Ho Quoc Tuan, a lecturer at the University of Bristol (UK), said that Vietnam had benefited significantly from foreign manufacturers diversifying production. The process of shifting production out of China by foreign manufacturers will continue, no matter how China eases its COVID policy. Vietnam is expected to benefit greatly.

There are many reasons why large corporations shift electronic manufacturing plants to Vietnam, including lower labour costs, simpler supply chain integration, and better access to free trade, due to Vietnam's participation in 15 free trade agreements (FTAs).

Many experts also believe Vietnam is an attractive destination for foreign electronics manufacturing projects.

Le Hong Hiep, a senior fellow at the ISEAS - Yusof Ishak Institute, said that international companies had started to find ways to shift production to Vietnam. Vietnam is an important partner in many FTAs, with more than 10 agreements signed, including with the major economies such as the EU with the EVFTA and the UK in the UVFTA. So companies shifting to Vietnam benefit from continued exports to not only the United States but also other markets.

According to Burkhard Schrage, head of the Management and MBA programme, at RMIT University Vietnam, the strong commitment of technology firms and suppliers to pour in the capital shows growing confidence in Vietnam's ability to upskill the workforce, comply with global production standards, and implementing good governance in the supply chain.

Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes