Recently, Vietnam has become an emerging market for outsourcing in the global community. When the US-China trade war happens, Vietnam is a potential choice for the global business who are finding a new location for outsourcing destination. So why Vietnam? Why do many companies decide Vietnam is their next destination for outsourcing their business?
According to HSBC Bank’s report of Frontier Market in Asia, Vietnam is mentioned as a potential country during COVID 19. Additionally, Vietnam is the best long-term growth country in Asia with a stable FDI growth rate. Besides, the ability of well controlling COVID 19 in the first half-year of 2020 increase the truth from other countries to Vietnam.
Additionally, Vietnam's GDP in the second quarter of 2020 increases 0.4% compared with the same period last year with the effects from COVID 19, which is the strong proof of the impressive come back of the Vietnam economy.
As in the previous report on 28 May 2020, HSBC also told that Vietnam’s economy gets the advantages not only from Outsourcing service but also from intrinsic capability, which attracts a lot of foreign investment.
After 3 months of records of no new case in COVID 19, there are some new cases of Sars- CoV-2 from the community and this is a similar situation with other countries. However, according to the report, HSBC also put their trust in Vietnam that Vietnam can well manage the situation. GDP in the second quarter of 2020 achieved a 0.4% increased compared with the same period last year. HSBC bank predicts the growth rate of Vietnam will be 3% in 2020 and the only country in ASEAN has positive growth this year.
Vietnam and the EU just come through the free trade agreement which can reduce to 0% tax for 71% current products. After 7 years, about 99% of the Vietnamese product will be exempted tax.
The US-China war and Sars-CoVid19 are the reasons for the shift of many big manufacturing giants out of China. For example, Japan planned to move some of its businesses from China to Japan and Southeast Asia, and most of these companies will be moved to Vietnam.
The big competitive advantages of low cost, reasonable tax policy, advantages of geographical location, infrastructure, and a young, experienced human resource attract a huge FDI to Vietnam.