Vietnam overtakes Indonesia as ASEAN's top investment magnet: survey

By Bui Hong Nhung   August 15, 2016 | 12:08 pm GMT+7
Vietnam overtakes Indonesia as ASEAN's top investment magnet: survey
Women work at a tea factory producing black tea for export in Yen Bai province, Vietnam, August 4, 2016. Photo by Reuters/Kham.

US firms cast Vietnam's continued cheap labor as a major competitive edge.

40 percent of U.S. enterprises said that Vietnam was their priority market for future business expansion in the Association of Southeast Asian Nations (ASEAN), according to the ASEAN Business Outlook Survey released recently by the U.S. Chamber of Commerce.

Vietnam has passed Indonesia to become the first market U.S companies are looking to expand in across ASEAN, according to the survey. Indonesia ranked second with 38 percent, followed by Myanmar (34 percent) and Thailand (30 percent).

The survey revealed that more than half of the respondents (53 percent) believed the ASEAN markets have become more important in terms of their companies’ worldwide revenue over the past two years. 49 percent expected to increase their ASEAN workforce by the end of 2016.

“The ASEAN region continues to be a dynamic and important market for U.S. businesses, and one that corporate executives cannot ignore,” said Tami Overby, the U.S. Chamber of Commerce’s senior vice president of Asia.

Vietnam was also voted the second market for moving investments from China into ASEAN with 17 percent of the vote, following Malaysia at 19 percent.

The surveyed said that Vietnam has many competitive advantages like low labor costs, good personal security and a stable government and political system.

However the country still faces problems regarding corruption, infrastructure and legislation. In addition, more than 40 percent of respondents said they were dissatisfied with government agencies, especially customs and tax authorities.

The ASEAN Business Outlook Survey is an annual poll that collects opinions of thousands of senior business executives representing U.S. companies in all ten ASEAN markets.

This year’s survey was carried out from April 25 to May 24.

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