Sun, Oct 07, 2007 - Page 8 News List

All eyes on the money in Vietnam

By Darson Chiu and Chen Ho 邱達生,何振生

Although China has been widely accused of creating an oversupply that its own demands and the global market can not handle, China's trade with the world has been expanding and it has been adopting a more aggressive attitude toward the economy.

In addition, foreign investors have been investing large sums of money in China, in order to capitalize on the booming economy by producing goods for export. There is no question that, since China's accession to the WTO, it has been able to strengthen its trade competitiveness and attract foreign direct investment (FDI) from Taiwan and other countries.

In light of the current economic scene, it would seem that a slowdown in China's economy is not going to happen any time soon.

With this in mind, it is only logical that companies from around the world should continue to invest in China and assist with the expansion of trade.

But the history of large economies has shown that no nation is able to expand its economy indefinitely.

One important lesson to be learned is that it is necessary for businesses to diversify their investments. In the case of China, this advice is especially useful because its economy has been growing for some time now and by now it looks like one great big bubble.

In addition, many countries in Asia have been seeking to improve their trade competitiveness and investment climate. Smart investors should not focus only on China, but should take a look at opportunities in other Asian countries that may provide better returns and serve as insurance.

Taiwan is an excellent example a country suffering from an infatuation with investing in China. Businessmen from Taiwan have played significant roles in driving trade growth in China and fueling its rapid economic growth.

But some Taiwanese businessmen know all too well that there is a need to diversify foreign investments. As a result, many of these wise investors have broadened their horizons, some choosing another rising star -- Vietnam.

Taiwan's investment there is ranked the highest among all the countries investing in Vietnam. It stands to reason that many businessmen see it as an excellent spot for investing.

Vietnam's economy was expected to get a sharp boost from joining the WTO, and see its economy growing faster than before.

China has had the same experience and it makes sense to expect a similar rapid rise in Vietnam.

It would be prudent for investors to open their eyes and invest in places other than China -- such as Vietnam -- so as to diversify their source of capital. Vietnam's economy shows great potential for growth.

Data on trade shows that Taiwan has been Vietnam's fifth-largest trading partner since 2005.

In addition, Taiwan is the ninth-biggest destination for Vietnam's exports and No. 3 in terms of the origin of its imports.

With abundant natural resources, Vietnam is poised as one of the most promising emerging markets. With a population of approximately 84 million, the quality and efficiency of its human resources are impressive according to Taiwanese investors already operating in Vietnam.

The country launched economic reforms in 1986 and has opened its market slowly but surely ever since. The reforms have helped Vietnam transform itself from a conservative economy to a market-driven one. Starting from the 1990s, Vietnam's significant real GDP growth, booming job market, decentralized economic environment, and increasing per-capita income have attracted the attention of businessmen all around the world.

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