Home » Business » Vietnam weathers global downturn well: HSBC

Vietnam maintained double-digit export growth last year, weathering the global downturn extremely well, according to a HSBC report.

In its Global CVietnam weathers global downturn well HSBConnection Report released in HCM City on March 28, HSBC noted that the Southeast nation’s export earnings grew by 20 percent driven by telecoms, plastics, clothing and apparels.

Its GDP growth of 5 percent a year remains sustainable in the medium term as the growing internal market boosts FDI, as tourism and agricultural exports help finance industrial upgrading, and as new power plants end the perennial energy shortages.

And a widening range of industrial exports, higher reserves and a larger home market may reduce the volatility of growth.

The bank said by 2030, China will have overtaken the US as Vietnam’s largest trading partner. Exports to Asia (excluding Japan) are forecast to grow by more than 15 percent a year out to 2020.

Apart from China, Bangladesh, India, Indonesia and Malaysia will also be fast growing export partners for Vietnam.

Plans to expand the ASEAN Free Trade Agreement to zero tariffs on all goods by 2015 will be an additional factor supporting Vietnam’s trade with other economies in the region over the medium term.

HSBC forecast that over the next two decades, China will overtake the US as Vietnam’s largest export market. But by 2030 the US and Japan will still be among Vietnam’s top three export partners, partly reflecting Vietnam’s product mix.

Vietnam’s exports are largely weighted towards clothing and apparel, textiles and wood manufactures and telecoms equipment and these are key sectors which the advanced economies tend to need to import in quantity.

Vietnam is well located to take advantage of emerging Asia’s undisputed status as the most dynamic trading region in the world. China, India, Malaysia, Indonesia, Bangladesh and the Republic of Korea will all be among the ten fastest growing export routes over the next twenty years.

Export growth to Europe (excluding Russia) is expected to average almost 10 percent a year from 2013 to 2020. Export growth to Australia, New Zealand and Oceania will pick up sharply in the longer term and will average 10 percent from 2016 to 2020.

Exports to Latin America will grow by an average of more than 10 percent from 2013-20, with trade routes to Brazil proving particularly dynamic.

Jasmine Lau, an HSBC executive, praised Vietnam’s efforts in containing inflation, stabilising the exchange rate, and settling bad debts.

She said Vietnam is a potential market and one of the bank’s priorities in its business strategy.


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