Chamber in Review
Manufacturing and More: Investment in Vietnam
Manufacturing and More: Investment in Vietnam<br/>製造業以外:投資越南

Manufacturing and More: Investment in Vietnam<br/>製造業以外:投資越南

Vietnam’s economic reforms have made it one of the most dynamic emerging markets globally. 

Consul General of Vietnam Pham Binh Dam explained at the Chamber’s webinar on 24 August that, even amid Covid-19, the country had managed a growth rate of 5.6% in 2021, with the figure expected to rise to between 6% and 7% in 2022. 

“Covid has disrupted supply chains and manufacturing, but it doesn’t change the trend of Vietnam being one of the prime locations for the China Plus One strategy,” he said.

The Consul General added that Hong Kong remains one of Vietnam’s most important trading partners. He encouraged investors to look into opportunities in digitization, tourism and hospitality, and infrastructure, as well as manufacturing.

Hoang Duong, Chief Representative of KPMG in Da Nang, highlighted Vietnam’s attractions as a manufacturing base, including its well-educated and cost-competitive labour force. He also explained how recent free trade agreements have helped Vietnam to integrate further into the global economy, such as the agreement with the European Union (EUVFTA), and the Regional Comprehensive Economic Partnership (RCEP). 

The signing of the EUVFTA, which came into force in August last year, had been a major boost for Vietnam, Hoang said. 

“Since then, there has been substantial growth in trade with the E.U.,” he said. “Not only companies moving their factories to Vietnam, but also international companies who want to invest in Vietnam in order to expand into the ASEAN market.” 

These agreements have lowered or eliminated tariffs, simplified import and export procedures, among other benefits. 

“It is not just about the tariff reductions, but also the standards, for example IP protection,” Hoang added, which help to make Vietnam an attractive platform for investment into the wider region.

Vietnam managed to keep Covid largely at bay for more than a year, but since the summer has been battling a surge in cases. However, Hoang said, the economic disruption should not be too severe.

“The government is strongly committed to controlling the situation and taking measures to protect public health and continue production,” he said. “Companies are also taking every measure to ensure their factories are still running.”

Also speaking at the event was Anthony Lam, CEO of Golden Resources Development, which operates in industries including ports, shipping and infrastructure, as well as running more than 400 branches of Circle K in the country.

Lam said that the Vietnamese workforce was highly motivated and energetic. For example, Circle K staff members were willing to live at their workplace for two weeks during the recent Covid-related lockdowns, enabling the stores to stay open to serve the community.

“After they finish work, a lot of our staff spend their time learning English or accounting – they want to upgrade themselves,” Lam added.

There are also opportunities for Hong Kong businesses in professional services, where there is still an expertise gap, with demand in areas ranging from banking and accounting to legal and sustainability. The expected urbanization of the country in the years to come means this demand is set to continue. 

“Infrastructure building is following the model of China, with roads, sea ports, rail and energy infrastructure being built.” Lam said. “Hong Kong can definitely provide the engineers, consultants, architects and management needed for these projects.” 

Lam also echoed Hoang’s comments on the benefits that the FTAs were bringing to the country. “Asia is becoming the centre of the world for trade,” he said, “and Vietnam is in the middle of it.”

Currently, Vietnam’s vaccination rate is relatively low compared to some developed economies, but the country has sped up the pace of vaccinations in recent weeks. The speakers agreed that they expected to see the majority of the population vaccinated as 2022 gets under way, to enable a return to relative normal for Vietnam by the middle of 2022.


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