Vietnam needs to develop domestic support industries and industrial clusters to create collaborate opportunities among domestic and foreign businesses, allowing easier experience and technologies exchanges, according to a report.

Chief Representative of AHK Vietnam Marko Walde (second from right) discusses
about investment environment with participants at the conference in Hanoi on June 20

The AHK world business outlook 2019 was released in Hanoi on June 20 by the Association of German Chambers of Commerce and Industry (AHK) in Vietnam at a press conference.

The outlook, conducted with the participation of nearly 1,000 German entrepreneurs in Vietnam from April 1 to April 31 this year, showed Vietnam continues to be an investment destination for German businesses with high expectations of economic development in the medium term.

“German enterprises continue to see positively about the development situation of their businesses as well as the prospects for growth in 2020, despite the instability of the global economy due to escalating trade tension,” the outlook said.

As many as 77 percent of German businesses in Vietnam said their business situation is better this year, much higher than the average of Southeast Asian countries of 61 percent.

With many achievements in economy, investment and social development in 2018, Vietnam received confidence from German enterprises in economic development within the next 12 months, with 67 percent of firms optimistic.

The outlook also revealed that 55 percent of German companies in Vietnam intend to expand their activities in the country and 59 percent expect to hire more workers.

German enterprises expect that the free trade deal between the EU and Vietnam will improve the legal and economic policy framework in Vietnam.

However, 51 percent of German businesses stated that economic policy in Vietnam will be a challenge to their development within the next 12 months.

Chief Representative of AHK Vietnam Marko Walde said many German businesses want to do business in the long term from 20 years to 30 years in Vietnam and needed an encouraging business and investment environment.

The businesses do not want to build a factory that import parts, then produce and export. They want to set up factories serving sustainable business development, creating partnership with Vietnamese firms and competitive environment in Vietnam, Walde said.

He said other important factors that contribute to the development of businesses from the perspective of the German enterprise are domestic market demand, the stability of the political system, the source of high-quality labour and regional demand.