European business leaders are optimistic about Vietnam’s trade and investment environment in the first quarter of 2021 since the outbreak of Covid-19, according to the latest report released by the European Chamber of Commerce (EuroCham).
| European businesses are more positive about Vietnam investment environment in 2021. Photo: EuroCham |
The Business Climate Index (BCI) conducted by YouGov Vietnam found that 57% of EuroCham members predicted “stabilization and improvement” about Vietnam’s economic prospects in the first quarter of 2021 (Q1). That compares to 39% in Q3 2020 – a rise in confidence of 18 percentage points. Only 10% of surveyed businesses believe that the economy is likely to deteriorate in Q1 2021.
While Covid-19 continues to develop new variants outside Vietnam, European businesses cautiously look forward to a great year ahead. “The continued upward trend in positive sentiment suggests a growing confidence in Vietnam’s trade and investment environment – standing in contrast to the situation elsewhere in the world,” Thue Quist Thomasen, CEO of YouGov Vietnam, added.
| Source: EuroCham. Screenshot: Phi Nhat |
According to the survey, in 2020, the optimistic sentiment of European businesses in Vietnam in Q3 was seen continued stabilizing and rising in Q4. This indicates a driver for growth in 2021 in general and Q1 in particular.
The European businesses are hopeful about the economy’s improvement, and about 30% of businesses plan to increase headcount and investment. More than 40% of business leaders forecast the volume and revenue of orders in Q1 2021 will increase moderately or significantly.
| Source: EuroCham. Screenshot: Phi Nhat |
“The latest BCI paints a positive picture of Vietnam’s business environment as we look ahead to 2021,” EuroCham Chairman Nicolas Audier said. “The growth in confidence we have seen over the last 12 months is a testament to the government’s swift and effective handling of Covid-19, and creates a strong foundation for the next five years of Vietnam’s socio-economic growth.”
The BCI climbed six points in the last quarter of 2020 to reach 63.6 – ending 2020 on a high note. In total, the index rose 37 points over the course of last year, after falling to a historic low in Q1 with the initial outbreak of Covid-19. Since then, the BCI has maintained positive growth as Vietnam’s successful handling of the pandemic and implementation of the EU-Vietnam Free Trade Agreement (EVFTA) combined to improve confidence and boost business.
Some 60% of European business leaders in Vietnam believe that they have already benefited from the EVFTA since it entered into force on August 1. However, 33% also said that “administrative procedures” were still the main barrier for them to utilize the EVFTA – showing the importance of monitoring the implementation of this agreement.
European business leaders are looking forward to the increased trade and investment thanks to the agreement, while also highlighting some of the issues which need to be addressed to ensure its smooth and successful implementation, Mr. Audier added.
Mr. Denis Brunetti, President of Ericsson Vietnam, Myanmar, Cambodia & Laos told Hanoitimes about Vietnam’s economic prospects and his company’s investment plan in 2021.
What do you think about the outlook of Vietnam's investment environment in 2021? The Vietnamese economy demonstrated a high degree of resilience in 2020, sustainably growing at a faster rate than most countries around the world. This was due to strong leadership by the Vietnamese government in driving a visionary and unified ‘whole of country’ and ‘whole of society’ approach in successfully addressing the Covid-19 pandemic challenge. We foresee an even higher GDP growth rate in 2021 as the country and the world emerges out of the pandemic crisis. What are challenges and opportunities for your company in particular and European businesses in Vietnam as a whole in 2021? We see significant opportunities for European companies in Vietnam due to the government’s strategic vision and leadership in attracting high-tech foreign-direct investment (FDI), promoting start up entrepreneurship and securing such a significant number of free trade agreements, including the EU-Vietnam Free Trade Agreement (EVFTA), the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Coupled with strong political stability, Vietnam has clearly become a leading investment destination in the region and across the world. With over 65% of international manufacturing hubs shifting to Asia Pacific by 2025, we believe that Vietnam is well positioned to attract much of this smart manufacturing investment. We are highly optimistic about Vietnam’s economic and investment prospects in 2021 and beyond, and we are committed to fully supporting Vietnam’s ambition in becoming a high income and developed industrial nation by 2045. What is your investment plan in Vietnam in 2021? In 2021 and beyond, our clear strategic focus is to continue to fully support the government of Vietnam’s National Strategy on Industry 4.0 and Digital Transformation to 2025 and vision towards 2030, whereby the digital economy will account for 30% of Vietnam’s GDP by 2030. The company is fully aligned with the government in our shared belief that 5G will become the critical national digital infrastructure enabling and fueling Vietnam’s digital transformation journey, which will in turn create the next wave of socioeconomic development through high-tech FDI, science, technology and start up innovation. We are committed to continue working with Vietnam’s mobile operators and service providers to build the 5G networks across Vietnam, which will effectively lay the foundation for Vietnam’s inclusive and sustained GDP growth, fueled by IoT (Internet of Things), AI, Automation, AR/VR and machine learning – enabled by 5G as the enabling nationwide digital infrastructure. Through 2021, we will remain focused on bringing the latest mobile broadband technology to Vietnam, forging strategic partnerships in relation to smart manufacturing as well as continuing to partner with our customers and ‘Business Sweden’ in line with the government of Vietnam’s strategic vision in attracting increased high-tech FDI and start up entrepreneurship, which will help create new industries and new jobs of the future. Thanks for sharing your time with us. |
