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HSBC regards Vietnam as one of 20 key markets
At a CEO’s conference held on August 2, 2012, Pham Hong Hai, deputy managing director of the Hongkong Shanghai Banking Corp (HSBC) in Vietnam said that Vietnam economy is forecast to face difficulties in H2/2012 and that would be in 2013. As expected, Vietnam’s economy will grow only 5.1 percent compared with the target of 6-6.5 percent of government.
However, this is a general trend of global economy when public debts in euro and economic depression in the US have not shown any signs of recovery. The government had some initial successes in controlling inflation (5.35 percent in first 7 months, after reaching 18.58 percent in 2011).
On direct investment from foreign investors, Hai said that in spite of a decrease in foreign direct investment (FDI) into Vietnam (8.03 billion dong of total registered FDI into Vietnam, down nearly 33 percent year-on-year), FDI’s quality increased.
He said that in 2008, registered FDI capital hit a record with about $60 billion but over 40 percent was poured into real estate, which did not only make no surplus value for the economy but also exacerbated the trade deficit. In the first 7 months in 2012, FDI inflow into real estate accounted for only 20 percent and nearly 70 percent of the total was poured into manufacturing and processing industry sectors. This has helped improve the FDI capital structure.
In addition, most of enterprises focusing on medium and long term targets chose Vietnam as a major producing place such as Samsung, Nokia… Some Chinese, Thailand investors begin to move their business in Vietnam, helping Vietnam improve technology, said Hai.
He confirmed: “In 85 operating market over the world, HSBC still regards Vietnam as one of 20 key markets to invest”
However, he also pointed out some challenges for Vietnam’s economy such as difficult macro economic situation. In the 2011-2012 period, the growing rates of all economic sectors decreased. Enterprises in the first five months in 2012 did not see any growing signs; in June and July, it tended to fall down.
Banks are now very careful in giving loans due to increase in bad debts and capital borrowing expenses was relatively high, whereby enterprises find it difficult to find capital sources.
Moreover, HSBC Vietnam’s leader highly appreciated the quick respondse of the government in making policy decisions, including controlling inflation and restructuring the economy.
With enterprises, Hai advised to improve corporate administrative efficiency, make transparent reports and limit scratched investments in none-core sectors.
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