 Bloomberg, CNN and the BBC
have carried laudatory reports on Vietnam’s investment climate in the
days following a WEF Asia conclave in HCM City and the Government’s
semiannual sitdown with aid donors in Kien Giang. VietNamNet summary of
the stories:
Bloomberg: Today, Hanoi is rising
China and India have been the favored destinations for investment flows into Asia. However, reports the Bloomberg business wire, a wave of strikes and pressure to raise wage in these countries have prompted investors to seek more attractive destinations. And Vietnam could be a good choice.
“We are cheap, much cheaper,” says Nguyen Thanh Nam, General Director of FPT, an IT and mobile phone distributing company with annual revenue of US$1 billion.
According to Nam, Vietnam is ready to compete in luring foreign capital. “We are striving to becoming the pioneer,” Nam said.
Bloomberg wrote that in the past, investors heard similar things from Vietnamese promoters. After the US removed its embargo in 1994, a wave of foreign companies like Coca-Cola or Procter&Gamble landed in Vietnam but were quickly disappointed by corruption and red tape.
Today, Hanoi is rising on foreign radar screens, judges Bloomberg. The government is striving to hold down corporate taxes and to upgrade roads and ports. Plans to build nuclear power plants have been approved and Vietnam is discussing the construction of an express railway. Vietnam’s leaders are determined to roll back bureaucracy to reassure investors, adds the widely-read business wire.
CNN: Times are changing
CNN also carried a favorable report: “The World Economic Forum’s East Asia meeting chose Ho Chi Minh City for its first event in a true emerging market. Organizers were expecting about 250 to 300 business people this week, but more than 400 came from across the world.”
“The government is out in force too. Prime Minister Nguyen Tan Dung is everywhere, chatting up the opportunities. He wants Vietnam to be Asia’s manufacturing base of choice after China,” CNN told its worldwide audience.
“It’s a tall order. Currently Vietnam is seen as a production base for lower value-added goods like textiles, furniture or footwear. But times are changing. Samsung and Canon are both investing heavily in electronics manufacturing and service bases. Most of the big Asian carmakers, as well as Ford, are producing for the local market with an eye on exports later down the line.”
According to CNN, in 2008 about $70 billion was committed to Vietnam, up more than threefold from five years year. It’s fallen back to $20 billion last year. Not surprising, though, given the global economic picture.
CNN profiled Tom Schneider, a German businessman, who has has just laid out $12 million to build a tannery at an industrial park on the outskirts of Ho Chi Minh City. Schneider has built eight factories in Asia in the past 16 years. In Vietnam it took him just 22 months, from finding the land to building the factory and training the workforce – his fastest project anywhere.
Schneider now treats 80,000 hides a month, enough for 1.5 million pairs of shoes. Timberland is his biggest customer. And though Scneider readily admits that tanning is “environmentally hostile,” his new plant is ‘greener’ than his plant in China, which has received a silver medal standard for environmental protection from Timberland.
“So why move to Vietnam,’ CNN asked. Its answer? “Vietnam is cheaper. Labor costs are about 60 percent of China’s although senior management is still more expensive. The country is close to many of his key customers, and there’s little state intervention, as long a businessman observes workplace and environmental standards. And in the long run, Vietnam has key access to a vast and cheap labor pool across the borders of Cambodia and Laos.”
(Source: Vietnamnet)
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