With its effective pandemic prevention and control policies and many policies to promote production and open the economy, Vietnam is highly recognised by foreign investors. (Photo:VietnamPlus)
Hanoi (VNA) – Vietnam has been upgraded from its frontier-market status to the emerging market status, according to an article posted on portfolio-adviser.com, a news website based in the UK.
The country has thriving human resources, with more than 70% of the population aged under 35 with the advantage of competitive labour costs compared to many other countries.
Years of consistently high GDP growth are due to an attractive combination of political stability with sound pro-market execution from the government which has managed to slash poverty from 17% to less than 5% in a decade, the article wrote.
“Perhaps the best-known growth driver for Vietnam is its step-change in foreign direct investment (FDI), benefiting from an increase in exports due to what is widely known as China Plus One,” it said.
The share of Vietnam's exports, especially to the United States, has steadily increased over the years. The COVID-19 pandemic, with a series of global impacts, has led to a change in supply chains as multinational companies consider how to restructure their businesses.
The country continued to sign more than a dozen key trade agreements during the pandemic-triggered lockdown. These partnerships will make it easier for companies to do business in Vietnam, positioning itself ever more as a manufacturing expert with ease of access to broad, international markets and benefitting from 3,000 kilometres of coastline and the close connections to China.
NhậpVietnam is shifting to manufacturing value-added products, especially electronics. (Photo: VietnamPlus)
According to the writing, Vietnam is now moving toward manufacturing higher-value products, more in electronics rather than textiles. Electronics have increased to more than 40% of goods exported from less than 15% in 2010.
Another testament is that last August, Apple announced that they would start producing MacBooks and Apple watches through their suppliers in Vietnam, in addition to some iPad products. The company has switched to manufacturing in this Southeast Asian country during the pandemic. This move will promote the construction of large factories and a greater commitment to investment in Vietnam.
One of Vietnam’s most critical FDI sources is Samsung Electronics. The technology giant employs tens of thousands of people in Vietnam and is the largest investor in the country, with 50% of its handsets being produced there.
There is frequent hope that Vietnam will be upgraded from its current, off-benchmark, frontier market status to emerging market status by MSCI. The Vietnam stock market overall now meets the size and liquidity requirements to be included, with a four-fold surge in retail participation during the past 2 - 3 years, driven by digital account technology, the article added.
It said that the reversal of deglobalisation is one of the biggest problems of the present time. Trade wars, tariffs, a global pandemic and even a war between two democracies in Europe mean that all companies must focus on controlling and maintaining supply chain resilience response.
These changes will create opportunities for the parties if they are sensitive enough to take the initiative and implement it, according to portfolio-adviser.com, affirming that Vietnam is certainly in a good position to become one of these beneficiaries./.
