|A garment and textile production line. Việt Nam has received greater attention as an alternative manufacturing hub as businesses increasingly adopt a ‘China plus one’ diversification strategy. VNA/VNS Photo
HÀ NỘI - Corporates are optimistic about their businesses in Việt Nam, with 58 per cent having existing and future plans to expand sales in the country.
This was released in the 'Winning in ASEAN' report launched by Standard Chartered on Thursday, showcasing business sentiments, opportunities, and strategies corporates can undertake to navigate the global shifts and drive growth in the region. The findings underscore the impetus for greater effective public-private partnership (PPP), to accelerate recovery and resilience in ASEAN and beyond.
The report shows that Việt Nam has made significant progress in becoming a dynamic, cost-competitive nation. The country has received greater attention as an alternative manufacturing hub as businesses increasingly adopt a ‘China plus one’ diversification strategy.
Anchoring on three strategic national plans including New National Industrial Policy, Digital Transformation Plan, and National Strategy on Green Growth, Việt Nam has a long-term plan to digitise production and supply chains. For instance, it is developing smart factories to improve efficiency and competitiveness, as well as foster priority industries and green growth.
Michele Wee, CEO, Vietnam, Standard Chartered, said: “Việt Nam’s medium to long-term prospects remain bright, supported by its favourable demographics, improving domestic fundamentals and strong commitment to regional and global integration. As an increasingly important player in international trade and global supply chains, and with its role as an alternative manufacturing hub, Việt Nam continues to present appealing opportunities for businesses looking to expand in the region.”
In 2021, ASEAN was the third highest recipient of Foreign Direct Investment (FDI) globally, with inflows of US$74 billion, returning to pre-pandemic levels. Some 50 per cent of ASEAN’s FDI inflows originate from the US, EU-27, and China. Intra-ASEAN FDI contributed about 12 per cent of the region’s FDI inflows in 2021.
Trade agreements, such as the Regional Comprehensive Economic Partnership (RCEP), are expected to further accelerate growth. With RCEP in place, 81 per cent of business leaders surveyed plan to increase investments in ASEAN over the next three to five years. Overall, 93 per cent of them expect positive revenue growth from their ASEAN businesses.
Benjamin Hung, Chief Executive Officer (CEO), Asia, Standard Chartered, said: “ASEAN is an oasis of growth, with its GDP forecasted to grow about 4 per cent annually to $4.5 trillion by 2030. Amid global complexities, we see structural trends presenting significant opportunities in ASEAN, where there is growing inter-connectivity in trade and capital flows, strong digital adoption, and an acceleration of green transition. Corporates need to act decisively to capture what ASEAN has to offer today. As a leading international bank in the region, Standard Chartered is committed to supporting our clients in capturing these exciting opportunities.”
Business leaders will also progressively step up on net-zero commitments to drive long-term growth. Some 52 per cent of those surveyed plan to invest in sustainability initiatives within the next three years.
Capturing ASEAN’s full potential requires active collaboration between the private and public sectors to bring synergies and break barriers.
Heidi Toribio, Regional Co-Head, Client Coverage, Asia, Corporate, Commercial and Institutional Banking, Standard Chartered, said: “Regional and international companies are increasingly realigning their business models and embedding sustainability to future-proof their operations. At Standard Chartered, we are committed to work with our clients to re-visit their investment strategies and achieve their growth ambitions. As the only international bank with full presence in ASEAN, our diverse network, in-depth local knowledge and comprehensive suite of capabilities set us apart as the ideal banking partner.” VNS