The new six favored emerging market economies
Diverse and dynamic economy with young, growing population
Vietnam has been experiencing unprecedented political and social stability since reunification in 1975. International trade and foreign investment is booming! Vietnam is also one of the CIVETS countries, some of the most-promising, emerging market countries, countries second only to the BRICS group in their commercial potential. For years, this dynamic country has enjoyed an accelerated and sustained growth rate. Its average GDP growth rate between year 2000 to 2016 was a remarkable 6.15%! Vietnam ranked as the third-best-performing Asian country in the last two decades in terms of economic growth. Vietnam is expected to be among the top 20 economies by 2050 as projected by PricewaterhouseCoopers (PwC) in a 2017 report. According to another estimate, Vietnam’s economy will be 70% the size of the UK’s by 2040.
Integration into the Global Economy
Vietnam’s astonishing progress stems from its government’s continuous economic reforms. These new policies enabled the country’s admission to WTO, ASEAN, APEC, and the recent partnership with the European Union Free Trade Agreement and other bilateral FTAs. The Trans-Pacific Partnership agreement (TPP), now called CPTPP since the APEC summit in Danang, Vietnam in November of 2017, should also come into effect soon. The CPTPP clauses are being renegotiated by the eleven remaining members and are expected to be finalized in 2018. This historic international economic partnership is eagerly awaited. Vietnam, strategically located at the heart of a densely populated community of 650 million inhabitants, the Association of Southeast Asian Nations (ASEAN), is poised to also take maximum advantage of CPTPP’s multilateral benefits and opportunities.
Young and Dynamic Consumer-oriented Market
Vietnam’s population is expected to reach 100 million by 2025. The buying power of Vietnam’s emerging middle class is growing every year. According to the World Bank, Vietnam reached the mid-income range of countries in 2013. Its rapid rate of urbanization, population growth and youthful demography all favor the continued growth of domestic demand and consumption. Vietnamese consumers want the greater variety and quality that international, imported commodities, services and luxury brands have to offer.
The industrial sectors particularly the manufacturing and construction sectors have also demonstrated impressive progress in supporting the country's socio-economic transformation. Vietnam invested heavily in its infrastructure to improve transport flow throughout its territory and boost the confidence of foreign investors. As foreign and private investments pour in along with new technologies, the government is able to improve the country’s infrastructure. Vietnam is working to position and maintain itself as a manufacturing hub in Southeast Asia. New transport and energy projects in industrial zones reflect the country's development priorities. These are commitments to the state's five–year socio-economic development strategy of 2016-2020. In addition, other major public transport projects are underway aiming to reduce traffic congestion in main cities such as Hanoi, Danang and Ho Chi Minh City.
Diversified Export Growth
In the last decade, Vietnam has been known as a major producer/exporter in agri-food, textile products and footwear. However, thanks to substantial FDI, there has been a remarkable shift in its export structure in recent years. Economists see a sharp rise in total export values within a wider range of merchandise categories. Electronic products such as smartphones and their accessories now occupy the largest portion of total Vietnamese exports. The country relies more on technological products, high value-added merchandises such as automotive products, electronics, computer hardware, software and IT solutions. Vietnam managed to average 15% export growth over the past five years.
The Future is Now
Why is Vietnam an interesting place to do business today? A robust domestic demand and a strong, young, cost-competitive and skilled workforce are some of the reasons. Furthermore, growing incomes coupled with booming retail industry, rise of e-commerce, improvements in international trade laws and market entry regulations are among the indicators of this country’s business attractiveness. The government of Vietnam has issued reforms to encourage enterprises and to draw even more foreign investment in recent years. The country aims to become an industrialized economy by 2025. Business opportunities are multiplying at a fast pace, new avenues for collaboration and profitability have never been more enticing. Do you know how to benefit from this opportunity? Let us show you. Contact us today.