In the current context, the government’s policies play a vital role in business development, according to Mr. Huynh Thanh Dien, a lecturer at the University of Economics in Ho Chi Minh City cum financial expert.
Many enterprises in Vietnam are currently facing several difficult challenges in running their operations and these ongoing obstacles are very likely to have a serious effect on their resilience in the long run.
Prime Minister Pham Minh Chinh chaired a hybrid meeting with foreign-invested enterprises and business associations on September 17, during which he pledged to create favourable conditions for FDI enterprises to invest successfully and sustainably in Vietnam.
From a deep decline in the third and fourth quarters of 2021, Ho Chi Minh City's economy in the first months of 2022 is making strong recovery steps. Gross Regional Domestic Product in the first quarter increased by 1.88 percent over the same period. Continuing the growth momentum, in April, the city recorded many bright spots, but there were still many challenges to face.
According to Mr. Dao Minh Chanh, Deputy Director of the Department of Planning and Investment of Ho Chi Minh City, the city has been implementing a series of solutions to remove obstacles and difficulties and energize businesses to rise.
For the ‘Vietnamese people prioritize using Vietnamese goods’ campaign to be highly effective, the Government should have policies to support Vietnamese private enterprises and business households on par with FDI enterprises.
The sharp increase in gasoline prices is putting pressure on the logistics industry, forcing businesses to increase service prices; It is forecast that manufacturing enterprises will face many difficulties. When the price of fuel goes up, carriers are required to increase their prices or take some losses.
The stock market as well as the real estate market faced a worrisome issue in 2021. Credit increased strongly, in which retail credit was preferred by banks because the risk coefficient when calculating Capital Adequacy Ratio (CAR) according to Circular 41/2016/TT-NHNN was lower than that of large enterprises.
Since the beginning of the new year, many enterprises have accelerated production to meet the delivery schedule. Along with that, units have been striving to connect with supply chains to increase the source of raw materials.
Information from foreign business associations in Vietnam shows that, in 2022, new foreign capital flows into Vietnam will not change suddenly. On the contrary, foreign capital flows from production expansion activities of existing foreign enterprises in Vietnam will increase sharply.
After more than half a month of loosening social distancing, Ho Chi Minh City records that 60 percent of enterprises have restored production with a scale of up to 83 percent. The relaxation of social distancing, along with the resumption of the transportation system from the city to other provinces, has created favorable conditions for enterprises to speed up production.
The Ho Chi Minh Export Processing Zone and Industrial Park Authority (Hepza) Business Association, on October 8, said that foreign investment in Vietnam in general and HCMC, in particular, has many positive signs.
Foreign investment inflows into Vietnam during the first nine months of this year rose 4.4 percent year-on-year to US$22.15 billion despite the impact of Covid-19, according to the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment.
Eighteen percent of orders of European enterprises have moved out of Vietnam. Previously, many large FDI enterprises of Japan and South Korea had also informed Vietnamese enterprises producing supporting industrial products about moving some orders to neighboring countries. To avoid the risk of disruption in the domestic supply chain, Vietnamese enterprises have applied many solutions to maintain production.
Foreign investors still have high expectations for Vietnam's investment environment despite facing many difficulties at the moment due to the Covid-19 pandemic. Currently, there are still many solutions and ways to improve foreign investment attraction and prepare conditions to be ready to welcome the investment wave in the new normal.
Many investors said that Vietnam has been still strengthening its position as one of the more and more attractive investment destinations, being the first choice for foreign enterprises, especially those who are seeking to diversify their investment portfolios outside of China.