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By APD writer Alice
Hanoi, Dec .18 (APD) – Vietnam has been considered the hottest investment destination in Asia, according to an article published by US magazine Forbes recently.
According to the article, Vietnam attracted 17 billion USD in FDI commitments last year, arguably the largest for an emerging market relative to its 250-billion-USD GDP.
In the first quarter of 2018, it became the fourth largest Initial Public Offering market in the region, surpassing the Republic of Korea (RoK), Singapore and Australia. The realty market in Ho Chi Minh City is booming and GDP is growing at about 7 percent per annum.
It said the Comprehensive and Progressive Agreement for Trans Pacific Partnership (CPTPP) and EU-Vietnam Free Trade Agreement (EVFTA) are expected to be ratified soon, helping Vietnam further integrate into the global economy. Meanwhile, in 2020, the capital Hanoi will host the Formula 1 Grand Prix.
Explaining the reason behind such progresses, the article pointed to the fact that the country's leadership has agreed on an economic development vision that focuses on offering highly productive, cost effective labour for labour-intensive export manufacturing.
This has driven record FDI inflows, largely from more mature Asian economies such as Japan, the RoK, and Taiwan (China), of which over 90 percent are going into manufacturing.
According to the magazine, Vietnam has become integral to the global supply of many goods, from smartphones and electronics to catfish and cashews. The country is also poised to be a major beneficiary of the ongoing US-China trade tension, as foreign companies seek to restructure their supply chains.
The article noted the government's plan to equitise hundreds of state-owned enterprises (SOEs) has been critical to Vietnam’s growth story. The equitisation is attracting a flood of portfolio investment across several sectors, most notably consumer and healthcare. Such investment interest is likely to accelerate, following recent legislation drafted by the local Ministry of Finance, which stipulates that foreign ownership caps on listed companies - currently at 49 percent - will be lifted in 2019.
In addition, the article mentioned the country’s young, educated entrepreneurial population of 95 million, which is rapidly urbanising and experiencing real spending power for the first time.
It is easy to understand why international brands like Apple, Starbucks and McDonalds are betting big on Vietnam, it said, adding that the country's tech scene is also thriving.
(ASIA PACIFIC DAILY)
