Vietnam's economy is booming, with one of the highest growth rates world-wide
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.