Taiwanese Businesses Overcome Economic Recession in Vietnam

 

First of all, why Taiwanese businesses invest in Vietnam. It is due to the encouragement of Vietnamese government, comparative advantages in production cost and labour and similarities in culture. Vietnam joins WTO membership and facilitates trade relations between Vietnam and Taiwan. Therefore, the economic crisis has little impact on deep-rooted enterprises in Vietnam. For instance, in face of slow consumption in the world market, export enterprises cut down the production and expenses accordingly to continue the development. In case of recession, this is the new investment project. Due to their high banking debts, FDI projects withdraw from Vietnamese market. But for Taiwanese enterprises, they are less affected by monetary crisis as most of their investment capital are from families.

 

By the end of 2008, Taiwan has 1,940 projects in Vietnam and 90 percent are manufacturing enterprises. In recent years, with FDI influx in Vietnam, labour market and infrastructure are over-burden, causing difficulty in recruiting workforce. In addition, industrial zones in good location have been fully occupied while new projects have difficult in land clearance outside industrial zones.

 

Due to the inflation, Vietnamese government have raised the workers’ salaries and established unemployment fund. It has strong affect on the enterprises. I believe, there should be some appropriate policy to help investors overcome the present difficulties.

 

With less import of equipment and materials from Taiwan to Vietnam, the two-way import-export decreased by 20-30 percent. In January for example, Taiwanese export to Vietnam decreased by 40 percent and Vietnamese export to Taiwan 20 percent. However, the decrease is within general situation.

 

Together with Vietnam Chamber of Commerce and Industry, we have been promoting trade in each other’s market. In 2007, 26 Taiwanese business delegations have come and surveyed Vietnamese market. In 2008, there were 22 more delegations. As a result, there are 7 more investment projects in Vietnam. Currently, we have received 17 programmes of Taiwanese business delegations wishing to visit Vietnam.

 

In education, in 2008 the two sides have signed MOU to promote education exchange. Also in 2008, headmasters of 40 Taiwanese schools have visited Vietnam. Currently, Vietnam has some 1,200 students and researchers in Taiwan, the highest number of foreign students in Taiwan.

 

In economic recession, Taiwan has increased domestic demand, building infrastructure, creating jobs and encouraging consumption by giving each citizen US$104. I think the present crisis is more serious than that of 1997. Vietnamese government has applied timely policy to sustain economic development and promote export such as lending to businesses, decreasing interest rate, supporting 4 percent of interest rate for banking credits, encouraging tourism by reducing 30 percent in hotel and service expenses.