The survey was conducted by the German Chambers of Commerce Abroad, Delegationsand Representative Offices (AHKs).
Vietnam’s border reopening and the Government’s drastic and timely policieshave created a boost for post-pandemic economic recovery, said the survey.
German businesses are more optimistic about economic development in Vietnamover the next 12 months than they were in the autumn of last year.
Over 46 percent of them plan to recruit more employees in the coming year. Thesurveyed businesses also demonstrate that the most important factors for theirtrade and investment decisions in Vietnam are political stability, availabilityof skilled workers in technical and non-technical fields, and transport andlogistics.
Thanks to Vietnam’s participation in free trade agreements (FTAs), the countryhas favourable conditions to attract foreign direct investment (FDI) flows.
More than 73 percent of German businesses believe that the implementation ofthe EVFTA from August 2020 increases their competitiveness in Vietnam.
They regularly leverage the ASEAN-China FTA (ACFTA) and the Comprehensive andProgressive Agreement for Trans-Pacific Partnership (CPTPP).
Implementing their business activities in Vietnam, German businesses evaluatethe most important factors are the availability of skilled labour in technicalfields (58.3 percent), quality of education in technical fields (58.3 percent),and tariff trade barriers (56.5 percent).
Although German enterprises have shown resilience in post-pandemic recovery,they are facing risks and challenges caused by global uncertainties that makethem more concerned about their business development in the coming year.
Currently, they regard the greatest risk as the price of raw materials,followed by energy prices, and a shortage of skilled labour. The Russia-Ukraineconflict has also had an economic impact on their companies.
Higher costs for energy, raw materials and supply chain and logisticsdisruptions are their most worrying issue. This results in changes to theirinternational business investment activities, such as adjusted risk assessmenton locations and economic decoupling of world regions.
In the context of restrictions from the COVID-19 pandemic and supply chaindisruptions, allocating and diversifying investment and production activitieshas become a top priority of German businesses, said Marko Walde, ChiefRepresentative of AHK, at the press conference announcing the survey in Hanoi onJune 8.
“Instead of focusing on a specific market and production base, Germanbusinesses are expanding their supply chains, and 95 percent are looking atSoutheast Asia, specifically Thailand and Vietnam,” he said.
At the present time, Walde said that Vietnam has an important position in theflow of international trade.
“Among the 10 ASEAN member states, Vietnam is one of the four countriesparticipating in the CPTPP, and together with Singapore, it is the only twocountries with a free trade agreement with the EU so far,” he emphasised.
More importantly, the advantage with Vietnam as a production base also lies inthe fact that German and European enterprises could set up enterprises with100-percent-foreign capital, hardworking and inquisitive workers, as well asthe close economic, social and cultural connections between the two countries.
To further promote investment capital from Germany into Vietnam, Waldeemphasised the importance of Vietnam in developing a production supply networkand high-quality human resources, which were capable of meeting investors’demand.
The AHK World Business Outlook (WBO) is based on a regular DIHK survey ofmember companies of the German Chambers of Commerce Abroad, Delegations andRepresentative Offices.
It collected feedback from more than 4,200 German companies, branches andsubsidiaries worldwide, as well as companies with close ties to Germany inMarch and April this year.
AHK WBO is seen as a barometer of the business confidence among Germancompanies and as a key indicator of the German business situation and businessexpectations for Vietnamese economic development./.
VNA