BizLIVE -

Recently, HSBC released a report in which HSBC’s CEO Tim Evans presented some remarks on Vietnam’s international profile after successfully controlling the Covid-19 pandemic and Vietnam’s resilience through turbulent times.

Vietnam’s International Profile Grows with Increasing Economic Integration
Photo Credit: Financial Times
According to CEO Tim Evans, Vietnam’s international profile continues to grow with increasing economic integration from joining the WTO and the signing of 14active multi- and bi-lateral trade agreements. This international trade connectivity has been a major driving force for Vietnam's economic development, but it also means the economy might be impacted when subjected to a global crisis like Covid-19. However, the Vietnamese economy has shown its incredible resilience during these unprecedented times. In fact, the World Health Organisation and many other countries have lauded Vietnam for its highly successful and effective response in handling the pandemic. We must acknowledge the Vietnamese government’s outstanding efforts and extraordinary measures that were taken to contain the outbreak.
“I would also like to call attention to the remarkable determination of Vietnamese businesses community. The business community has decided to not surrender or succumb to the difficulties caused by the external environment but instead has looked to find ways to overcome the challenges they faced as a result of lockdowns, closed borders and social distancing measures. According to the recently published HSBC Navigator report, 68% of Vietnamese companies implemented changes over the last 12 months to cope with the pandemic. In addition, moving forward, they intend to focus their investment on sales channels, up-skilling their workforce, enhancing the customer experience and improving cash flow/capital management in 2021. They also intend to invest in technologies that will help improve speed to market, customer targeting and enhance automation / operational efficiency. In my own meetings with HSBC clients during 2020, I have seen first-hand how they seek to continuously improve their business model through leveraging digital transformation, proactively approaching banks to find solutions to optimise cash flow management and applying digital solutions to maximise operational efficiency”, Tim Evans said.
It’s worth noting of not only a continuous growth, but much of Vietnam’s recovery comes from internal forces. The General Statistics Office’s statistics show that manufacturing and services have continuously accelerated from the sharp decline experienced during the lockdown period, meaning that the economy has growth momentum. Exports rose 10.7% y-o-y in November, after upwardly revised growth of 12.2% y-o-y in October. While weakness in textiles and footwear (-12% y-o-y) has exacerbated as a result of the renewed lockdowns globally, strong expansion in machine equipment (62% y-o-y) and electronic shipments (6% y-o-y) have more than offset their declines leading exports ona steady recovery path. 
The PMI, although dipping to 49.9 in November after two months’ expansiondoes not mean a gloomy manufacturing outlook. The storm and flood disruptions were pointed as the reason for the setback, which is likely to be temporary. After all, new orders continued to expand, and the gap between new orders and inventory remained in positive territory. Therefore, HSBC continues to hold a positive outlook for the Vietnamese manufacturing industry and for the Vietnamese economy as a whole.
Another bright spot for Vietnam's economy in 2020 has been the Government’s consensus in pursuing the international trade integration policy which has been reflected by the conclusion of negotiation of the UK Vietnam Free Trade Agreement (UKVFTA) in December, the effect in August of the Vietnam - EU Free Trade Agreement (EVFTA) and the recently signed Regional Comprehensive Economic Partnership (RCEP). These agreements will help Vietnam diversify export markets and trading partners, which is also one of the best ways to minimise risks from excessive dependence on a specific trading partner which COVID-19 has made this risk apparent. The increased and diversified global integration will also help Vietnam access foreign capital sources, supporting Vietnamese businesses to become more competitive. HSBC CEO continues to see Vietnam as being among the world’s most attractive emerging economies.

DIEP NGUYEN