Though rapidly rising Delta COVID-19 infections have hit manufacturing in Ho Chi Minh City, Vietnam’s commercial hub, the big-picture story of Vietnam being a favored destination for foreign investment is not expected to change, the daily newspaper said. Even as forecasts are trimmed, economists have faith the nation will bounce back.

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Production of electronic parts at Youngbag Micromotor Vietnam in Vinh Phuc's Binh Xuyen Industrial Park

“In recent decades, Vietnam has excelled in reeling in the big fish in electronics, footwear and clothing,” it said. “Low labor costs, reliable infrastructure and a smooth bureaucratic process have attracted the likes of Samsung, Foxconn, Nike, Adidas, Gap and Levis.” Many factories that are still open are striving to maintain production under the “3 in 1” policy whereby employees eat, sleep and work on site.

While some expats have cleared out, many others have stayed. “The small- and medium-sized business owners who have investments here have stayed. Most are not panicking. They want to be here, so their companies can recover as soon as possible,” it quoted Simon Fraser, executive director of the Australian Chamber of Commerce (AustCham) in Vietnam, as saying.

HSBC has cut its economic growth forecast for Vietnam from 6.1 percent this year to 5.1 percent. “Despite near-term challenges Vietnam’s recovery prospects still look rosy with strong fundamentals,” wrote HSBC economist Yun Liu.

“Vietnam will bounce back because it has such a competitive advantage in labor costs,” she said.

Source: VNA