Vietnam’s rapidly expanding economy has caught the attention of many American businesses, prompting them to consider expanding their operations in the country. Due to the unpredictability of China, a growing number of firms are looking to diversify their markets and supply chains, and Vietnam is viewed as a promising alternative.
In what is being called its largest business mission to date, the US-ASEAN Business Council is organizing an event this week that will see executives from 52 US companies take part. The three-day event, led by former US Ambassador to Vietnam Ted Ossias, is focused on exploring new business opportunities in Vietnam.
Although the identities of the participating companies have not been disclosed by the US-ASEAN Business Council, some companies, such as Boeing and Netflix, have confirmed their attendance. Representatives from Boeing are expected to meet with government officials to discuss ways to enhance Vietnam’s aviation and defense capabilities, as well as further developing their partnership with the country.
Netflix, on the other hand, is evaluating how to comply with Vietnam’s Decree 71, a new regulation that requires foreign media companies to obtain a business license to provide streaming services in the country. Although Netflix already offers streaming services in Vietnam, it currently does not have a direct presence there. The media giant is reportedly planning to establish its first office in Vietnam soon.
Vietnam’s rapidly growing economy and expanding middle class make it an attractive destination for foreign businesses. Despite a global economic downturn in the past year, Vietnam’s GDP expanded by 8%. However, the country is also exposed to significant risks as it is one of the world’s most trade-dependent economies. If global demand for exports continues to decline, Vietnam could be one of the most affected countries. Oxford Economics forecasts that the country’s GDP growth will slow to 4.2% in 2023 due to a bleak global trading outlook and increasing financial risks.
Despite these challenges, many US companies remain optimistic about Vietnam’s long-term prospects. Some, like Intel, Microsoft, and Coca-Cola, have already invested heavily in the country. US investment in Vietnam surged to $10 billion in 2020. Vietnam’s relatively low labor costs, expanding consumer market, and strategic location in Southeast Asia all contribute to its appeal for US firms.
Nonetheless, doing business in Vietnam is not without its obstacles. The country’s legal and regulatory environment can be murky, and corruption remains a significant issue. Infrastructure is also a concern, with many regions of the country lacking basic amenities like reliable electricity and clean water. Moreover, Vietnam’s relationship with the United States has recently become strained due to the two nations’ differing views on human rights and democracy.
Despite these challenges, US companies are betting that the benefits of conducting business in Vietnam will outweigh the risks. As China’s economy becomes increasingly uncertain and opaque, Vietnam is emerging as an attractive alternative for firms seeking to diversify their operations. With its growing economy and strategic position in Southeast Asia, Vietnam is well-placed to become a significant global player in the years ahead.