A group of Vietnamese delegates yesterday invited Taiwanese businesses to invest in the Southeast Asian country, saying it continued to offer promise despite the recent spate of macroeconomic problems.
Nguyen Bao, a member of the Vietnamese delegation, told the investment forum he was “confident of Vietnam’s ability to weather the economic storm brought on by the US subprime crisis, [surging] crude oil prices, inflation and dong currency instability.”
Nguyen, a member of the Committee for Taiwan Affairs under Vietnam’s Ministry of Industry and Trade, said his government was fully aware of the situation.
Statistics released by the Asian Development Bank (ADB) in this month’s Asia Economic Monitor showed that Vietnam posted a 26 percent jump in inflation last month, a 50 percent expansion in credit last year and a widening of its trade deficit to US$16.9 billion in the first six months of the year.
ADB raised the question whether Vietnam was on the brink of a “financial disruption similar to the 1997 collapse in Thailand, which later ignited the Asian financial crisis.”
Theodore Huang (黃茂雄), chairman of the Chinese National Association of Industry and Commerce (工商協進會), sought to allay investor concerns by saying the Vietnamese government has been working on containing some of the problems.
“Taiwanese companies such as Tatung Co [大同], Compal Electronics Inc [仁寶], Chi Mei Corp [奇美實業], Uni-President Enterprise Corp [統一企業] and Hon Hai Group [鴻海集團] are just some of the new companies investing in Vietnam despite recent bad press because they see long-term value in their investments,” he said.
Huang Shi-hui (黃世惠), founder of Sanyang Industry Co (三陽工業), shared his investment success in Vietnam. He was one of the few who saw economic growth in Vietnam back in 1992 when everyone else called him a “fool.”
He compared investing in Vietnam to investing in the stock market.
“Sometimes the best time to enter is when everyone else is doubtful,” he said.
Fueled by a sharp inflow of foreign direct investment (FDI) since it joined the WTO, Vietnam has seen its annual GDP growth rise by an average of 7.5 percent since 2000. Its FDI in the first half of this year reached US$31 billion.
Despite these impressive figures, Vietnam now faces severe inflation and other economic woes. Its recent large-scale labor strikes have also spooked investors who question whether the authorities can contain external factors that are plaguing its economy.
Theodore Huang yesterday urged Vietnamese authorities to deal with the labor issue, with local media reports saying about 300 strikes had taken place in Vietnam to date this year in response to soaring inflation and low wages. Some reports said the frequent labor action has led to bankruptcies at some Taiwanese-invested companies.
The stakes are high for Taiwan, the third-largest investor in the country after South Korea and Singapore, the Bureau of Foreign Trade statistics showed.
Huang said that as of February this year, Taiwanese businesses had registered 1,817 investment projects in Vietnam totaling more than US$10 billion and is one of the country’s biggest trading partners.
To avoid the strikes that are plaguing some foreign-invested facilities, he advised companies to sign clear contracts with employees and set up a complaint channel to deal with problems before they explode.