05 Oct Vietnam: South East Asian superstar
For any international company looking for a vibrant, high potential market in Asia to invest in for sustainable growth, Vietnam is top of the list. An excellent manufacturing base, Vietnam is becoming increasingly attractive for companies looking for a China +1 strategy in the face of the US-China trade war. In 2019, more than 50 multinational companies decided to relocate their manufacturing operations (partially or fully) to Southeast Asia, largely Vietnam, from China, according to industry reports. The reasons varied from avoiding US tariffs to benefiting from low production costs to maintaining proximity with key markets. The Vietnamese government has been investing heavily in domestic manufacturing infrastructure thus attracting many foreign players in various sectors to set up factories. Even as Vietnam’s Asian peers have committed most to its economy, western countries too now see its attraction.
The country offers a winning combination of affordable labour costs and land prices, favourable corporate income tax rates, a slew of trade agreements (including the recent EU-Vietnam free trade agreement), a young and skilled workforce and a strategic geographic location.
A country of 97 million people, Vietnam also offers a large market for consumption, with an educated, young and internet-savvy population eager to spend, and with GDP per capita increasing by over 7% year on year.
The socialist one-party state of Vietnam is under the leadership of the Vietnam Communist Party. The President is the country’s head of state, elected from members of Vietnam’s National Assembly and considered to hold the second highest position in the political system, after the general secretary of the Communist Party. The President appoints the head of government, the Prime Minister. The current President of the country is Nguyen Xuan Phuc, who was elected by the National Assembly in October 2018 after former President Tran Dai Quang died in office, also concurrently, serves as head of party and state.