Vietnam's economic crisis hits Hong Kong and Taiwan enterprises

by:JIYALI     2021-08-18
Over the past few months, Vietnam’s severe inflation, currency devaluation, and the resulting strikes have put pressure on Hong Kong and Taiwanese companies that have moved from the Pearl River Delta to Vietnam and have layoffs or cut production. Although a year ago, Vietnam was still a hot investment destination for labor-intensive enterprises in the Pearl River Delta, a large number of textile, apparel, footwear and other enterprises have moved here one after another. But now, the enthusiasm of Hong Kong and Taiwan enterprises in the Pearl River Delta to invest in Vietnam has suddenly declined, and many companies that have invested have also begun to transfer their orders back. It is understood that countries such as Indonesia, India, and Cambodia have become new alternative destinations for Hong Kong and Taiwan enterprises in the Pearl River Delta to move overseas.   It is understood that the Vietnamese stock market has fallen for more than 20 days in a row, and the decline has been close to 60% this year; the inflation rate last month exceeded 25%; the depreciation of the Vietnamese dong accelerated, and as of the end of May it had depreciated 27% against the US dollar. The currency depreciation caused by inflation and the contradiction between enterprise labor and capital have put more pressure on Hong Kong and Taiwan enterprises investing in Vietnam, and also discouraged the enterprises in the Pearl River Delta that originally intended to transfer to Vietnam.   Chen Yanhong, general manager of Taiwanese enterprise Zhongshan Yongsheng Garment Co., Ltd., told reporters that due to severe inflation, the company's branch factory in Vietnam has soared from $80 a month to $120 to $150 per month. ‘Since investing in Vietnam, last year to this year has seen the fastest increase in costs. Chen Yanhong said that despite this, the company still feels lucky because there have been frequent serious strikes and labor disputes in surrounding companies.   Today, the company's Vietnam development plan can only be slowed down, and Vietnam's production is also slowing down, and orders are distributed to other branches. Chen Yanhong said, ‘Many people in the industry predict that there will be a more serious economic crisis in July this year. Nowadays, Chinese companies in Vietnam are panicking. ’  Hong Kong and Taiwan enterprises have suspended their investment in Vietnam.    It is understood that the recent economic crisis in Vietnam and the embarrassing situation of Vietnam’s Hong Kong and Taiwan enterprises have become a hot topic for Hong Kong and Taiwan enterprises in the Pearl River Delta. Because many of the companies investing in Vietnam have moved from the Pearl River Delta. A survey shows that there are currently more than 200 textile companies from China in Vietnam. However, the current crisis in Vietnam has caused many companies that originally wanted to relocate to shelve their plans, and even some companies that have already relocated their production lines to Vietnam have begun to stop relocating. Chen Changyou, chairman of the toy industry group of the Chinese Manufacturers’ Association of Hong Kong and vice chairman of the Guangzhou Association of Enterprises with Foreign Investment, said that due to the substantial increase in business costs in the Pearl River Delta in the past two years, the most popular topic for Hong Kong business gatherings is'investing in Vietnam', but only In one year's time, the admonition that 'investing in Vietnam needs to be cautious' spread to all chambers of commerce. He told reporters that many Hong Kong companies investing in Vietnam are not optimistic about the feedback. First, there is not enough labor, especially experienced labor is far behind the Pearl River Delta; second, many Hong Kong businessmen say they are not familiar with Vietnam’s financial system. The recent economic crisis shows that Vietnam’s financial environment is unstable. Chen Changyou also said that once a friend from Hong Kong businessmen revealed that they wanted to invest in Vietnam, but they have now given up.'Now the investment risk is too great. Many Hong Kong businessmen who have invested in Vietnam have complained. In the short term, many Hong Kong businessmen are interested in investing in Vietnam. reduce. Lin Guangde, chairman of the sub-group of the Federation of Hong Kong Industries, told reporters that many members have been very interested in investing in Vietnam, and the Chamber of Commerce has organized members to visit Vietnam in batches. ‘Three months ago, a group was organized, and the conditions for attracting investment in Vietnam are more favorable than before. Lin Guangde said that due to the poor domestic economic situation, Vietnam wants to attract foreign investment. However, none of the Hong Kong companies that have taken a keen interest to visit Vietnam have really invested in Vietnam.   The executive vice president of the Dongguan Taiwanese Investment Association, led by Zhai Suo, said that among the more than 6,000 Taiwanese-funded enterprises in Dongguan, 20% of them have moved or transferred their production lines. However, the current crisis in Vietnam has slowed down the pace of transfer of Taiwanese businessmen. Under the continuous sharp depreciation of the currency and severe inflation, Vietnam's original comparative advantage of low labor costs has been greatly reduced, and the transfer of traditional industries such as garments to Vietnam requires more caution.
Custom message
Chat Online 编辑模式下无法使用
Chat Online inputting...
Thank you for your enquiry. We will get back to you ASAP