Vietnamese stock market has fallen by two-thirds while the VND continues to depreciate substantially; moreover, trade deficit of the country has also been enlarging. In view of such alarming conditions, the presumptive investment heaven of Southeast Asia is causing worries to foreign enterprises.
Footwear enterprises in Dongguan, China, have also realized that Vietnam is no longer a paradise for investors and have consequently slowed down their investment plans in the country.
Most of the Chinese funded enterprises in Vietnam are holding a wait-and-see attitude towards the economic trend and are adopting various measures to control costs. While some firms have laid off workers, others have reduced their business operations. If the market situation fails to get out of doldrums, it is quite likely that a large number of companies would move out of Vietnam.
However, the situation is in gaping contrast for Chinese-funded textile enterprises in Vietnam who haven't been greatly affected by the financial crisis. On the contrary, some of the firms have even managed to procure profits in exports to US and EU because of depreciating Vietnamese currency.
Presently, there are over 200 Chinese textile investment enterprises in Vietnam and additionally some fabric and accessory manufacturing companies from China have also started setting up their production base in the country.
Although, financial crisis have brought about losses to some Chinese textile investment companies, they still have plans to buy factories in Vietnam because depreciation has scaled down the value of these units by nearly 40 percent bringing up an excellent investment opportunity.
Fibre2fashion News Desk - Vietnam
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