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6 May 2021 -

Letters from Vietnam – Spring 2021


Facts and information about business and investments in Vietnam

The opportunities and risks of doing business in Vietnam and Germany's smallest Federal State on the big stage that is Vietnam – these are some of the topics in our Spring 2021 regional report.

Huong Thi Hoang, Director of our Bremeninvest office in Ho Chi Minh City, sends quarterly reports with the very latest overviews of trends, opportunities and new developments.

Our topics for this Spring:

Opportunities and risks – an overview of trade and business in Vietnam
Aspirational architecture – Vietnam's economy has great potential
Aspirational architecture – Vietnam's economy has great potential © pixabay

Vietnam is a turbo-charged economy: it is growing faster than almost any other country in the world. With its 100 million inhabitants and proximity to China, Vietnam is both an interesting marketplace and an ideal production location for Western companies. However, the many opportunities presented by doing business in rapidly developing countries are associated with risks for which companies have to be prepared.

The opportunities and risks present in Vietnam are detailed in our overview report, "Trade between Vietnam and Germany – benefits and disadvantages for companies and investors"

Economic growth and foreign investments in the year of Covid-19
Vietnam's economy is booming, with one of the highest growth rates world-wide
Vietnam's economy is booming, with one of the highest growth rates world-wide © pixabay

Vietnam was one of the very few national economies in the world to record positive growth in the pandemic year 2020 (2.91 percent). The construction, production and supply industries grew strongly, whereas the logistics and service sector only showed the first signs of recovery in the last quarter of the year. European companies such as DHL, Kuehne & Nagel, DB Schenker and Bremen's freight forwarder, C.Melchers, all benefited from this growth despite greatly increased container transport costs, up by a factor of ten for shipping.

This makes Vietnam a more exciting market for international investors than ever before. In the past year, around 20 billion dollars of capital flowed into the country. Foreign companies account for 72 percent of all exports and 62 percent of all Vietnam's imports, or other words, the majority of the country's international trading activity.

Although the region around Ho Chi Minh City continues to attract the lion's share of foreign capital, Bac Lieu, a small province on the South Coast, was the site of the largest single project last year, involving a 4 billion US dollar investment from Singapore. This is to be the location of a gas-fired power station, with a generating capacity of 3.2 gigawatts. The region hopes this large-scale project will attract further investment in sectors such as renewable energies, agricultural equipment, trade, services and tourism.

A prominent investor which also hit the headlines in Vietnam last year was Foxconn. This Taiwanese supplier for the Apple group is building a production plant for iPads and Macbooks in Bac Giang, to the north of Hanoi. This project is in line with Apple's "China plus One" investment policy by which the group intends to diversify its production throughout the region. Not only will Apple benefit from more favourable manufacturing conditions, but it will also avoid any potential trade disputes between the USA and China by having production facilities in other countries. Vietnam is one of the foremost beneficiaries of this development. The new Foxconn manufacturing facility is not merely an extension of existing capacity: according to media reports, the group is actively relocating production capacity from China to other countries. A new Foxconn factory is also currently under construction in India.

Bremen presents itself to Vietnam
Interview with Huong Thi Hoang
Interview with Huong Thi Hoang © pixabay

The "Bremeninvest Info Day" in Vietnam, at the end of March, was a great success. More than 120 guests came along to find out how to use Bremen as gateway to starting their own businesses in Europe. Local producers also showcased their own goods as potential products for export. The event was covered by Vietnamese television and the press, appearing in numerous newspaper reports.

Speakers included not only Bremeninvest's office Director, Huong Thi Hoang, but also representatives from businesses such as the Bremen freight forwarding company Karl Gross, who talked about the opportunities that Bremen can offer to local companies that are looking for new markets. Bremen's excellent port infrastructure and wealth of high-tech industries are major plus points.

The event was co-hosted by the Investment and Trade Promotion Centre (ITPC) Vietnam, a business centre specialising in the marketing activities associated with trade and commerce, such as trade fairs, seminars and similar events.

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