MARKET OVERVIEW

1. Strategic location :

Located in the center of Asian, Vietnam has a strategic location , it is close to other major markets in Asia, the most notable neighbor of them being China. Its long coastline, direct access to the south China Sea and proximity to the world’s main shipping routes give perfect conditions for trading and international businesses

2. Stable GDP Growth :

Over the last few decades, Vietnam’s economic growth has been one of the fastest in the world. This rapid development started due to economic reforms launched in 1986 and the rise has been continuous ever since. GDP growing rate of Vietnam in 2018 is 7.08% – Highest level in the last 10 years, in 2019 is 7.02%, in general average GDP growing rate for the period from 2016 – 2020 is 6.84%, and according to the World Bank’s forecast GDP growing rate is 6.5% a year since 2020

3. Openness to Foreign Investment :

Geographical advantages and growing economy are not the only attractive features for investors. Vietnam has always been welcoming to foreign direct investment (FDI) and encourages it by constantly reviewing and improving regulations to make investing in Vietnam more flexible, more transparent and providing FDI incentives to attract foreign investment

4. Participating in Global Trade Agreements :

Another indication of openness to the global economy are the numerous trade agreements Vietnam has signed to make the market more liberal such as member of AFTA, member of WTO, Bilateral Trade Agreement (BTA) with the US, signed the European Union – VietNam Free Trade Agreement (EVFTA), signed CPTPP,…All these treaties show that Vietnam is eager to promote the country’s trading with other countries on the world

5. Growing Population with young demographics :

Large population (97 million people), over 70% in “Golden age” demographics – (from 24-55 years old), Vietnam ranks as the 14th largest population in the world. By 2030, the population will grow to 105 millions, as forecasted by Worldmeters. Unlike China where the population is ageing rapidly, the demographics of Vietnam is young. According to Worldmeters, the median age in Vietnam is 30.8 years in contrast to 37.3 years in China. The workforce is young and large and shows no sign of decrease. In addition, the country also invests more money in education then other developing countries

6. High pace of urbanization :

Over the past 30 years, Vietnam’s urbanization has grown at an average pace of 3.4% a year, the fastest in Southeast Asia. According to the Ministry of Construction, as of 2016, Vietnam had 802 urban areas and 10,000 rural residential areas.

The country’s urbanization rate grew from 20 percent in 1998 to 36.6% in 2016 with urban land acreage increasing from 630 square kilometers to 41,700 square kilometers, equal to 12.6% of the country’s natural area.

From the highlighted factors analyzed above, Vietnam is a potential land for attracting investment from international resources. However, in order to take advantage of the above-mentioned factors and turn potential into reality, Vietnam needs to mobilize additional financial resources, application of advanced technology and management technology, which is what international enterprises have advantages. Domestic enterprises have the advantage of being local enterprises, knowledgeable and experienced in implementing local legal regulations, understanding of the domestic market, having close relationships with local state agencies. The weakness of domestic enterprises is the strong point of foreign enterprises and vice versa, the strength of domestic enterprises is the weakness of foreign enterprises. It is very good to combine the two resources together on the basis of taking advantage of each other, harmonizing interests and sustainable development.