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and other governmental bodies to advocate large local corporates. Supporting these
for regulatory change, and provide teach- “WITH TRUST IN names as they embark on rapid growth
in sessions to transfer the best in interna- VIETNAM’S FDI with funding and supporting transactional
tional market practices that are conducive PERFORMANCE AND banking capabilities is critical to their
to attracting further FDI. Given our POTENTIAL, HSBC HAS success and the ongoing development of
strengths in international connectivity, Vietnam’s economy.
HSBC promotes Vietnam’s story to the MADE CEASELESS
world and assists our multi-national cor- EFFORTS IN FACILITATING % The net-zero transition is a top priority
poration (MNC) customers in understand- INBOUND INVESTMENT for governments and organizations glob-
ing the opportunities the market offers. ally. Vietnam has followed suit, by making
In 2023, I represented HSBC at a TO VIETNAM.” a bold commitment at COP26. In order
meeting between Prime Minister Pham to support this pledge, HSBC, as a mem-
Mr. Tim Evans
Minh Chinh and key FIEs in Vietnam, to ber of the Glasgow Financial Alliance
CEO of HSBC Vietnam
provide suggestions on what additional for Net Zero (GFANZ) Working Group,
steps the country could take to continue will work to mobilize and facilitate $7.75
to attract investors. Vietnam continues billion in sustainable finance under the
to effectively attract investment despite to our latest ASEAN Business Sentiment Just Energy Transition Partnership for
a challenging global economy. This is tes- survey, regulatory developments are Vietnam. Is sustainable finance a trend
tament to the opportunities the country among the biggest barriers for FIEs look- that banks will want to keep pace with?
offers and the fact that the story is shifting ing to expand in Vietnam, with 24 per This is much more than just a trend.
from just “FDI in and exports out”: we cent of surveyed companies pointing to It is a necessity given the urgency of the
are now seeing more companies moving the challenge of adapting to fast-changing fight against climate change. As such,
to Vietnam so that they can manufacture regulations and policies within the market. the transition to net-zero has become
in Vietnam for Vietnam. A more consistent and easy-to-compre- one of the HSBC Group’s key strategic
One need only look at the numbers. In hend regulatory framework would be a pillars. To achieve our net-zero goals, a
2023, Vietnam attracted $36.6 billion in very positive step forward in attracting path has been charted through our Net
FDI, an increase of more than 32 per cent new parties to invest in the market. Zero Transition Plan, bringing together
over 2022. As we step into 2024, it attracted That said, rapidly-changing regulations the steps we intend to take to deliver the
$4.29 billion in FDI in the first two months and policies are not the Number 1 barrier, ambition that we set in 2020. That includes
of the year, a year-on-year surge of 38.6 as many have thought. Our survey shows aligning our financing portfolio to net-
per cent. that local technological capabilities have zero by 2050 and achieving net-zero in
taken over regulatory navigation to be our operations and supply chain by 2030.
% What should be the key focus for Viet- the top challenge in expanding in Vietnam. To reach these goals and have a meaningful
nam to maximize its FDI opportunities? While it is an area of focus that the impact on the real economy, we are setting
Vietnam needs to work to continuously country needs to work on, it also reflects out our implementation plan to embed
refine its FDI proposition, because it is the potential to be a centre for innovation net-zero across all key areas of our busi-
competing against other countries. From as Vietnam moves up the value chain. ness, including the products and services
our discussions with clients, there are pain Many global tech giants like Samsung, we provide, how we manage risk, how
points that still exist and there is always LG, and Foxconn have chosen the country our policies can help drive change, and
room for improvement. They reference as a manufacturing base, while other how we govern ourselves, develop our
the need for accessibility to quality workers FIEs such as Hewlett-Packard, Robert culture, and measure our progress.
and the ongoing need to improve produc- Bosch GmbH, and Panasonic Corp. have
tivity as Vietnam moves up the quality established local R&D facilities. % What are the challenges in developing
curve. Vietnam still ranks behind other this plan?
major ASEAN markets in terms of work- % FDI aside, local corporates are playing The most significant challenge in devel-
place productivity, with output per hour their part in driving Vietnam’s economic oping a transition plan at this early stage
worked being relatively low at 9.7 compared growth. How is HSBC supporting this? is the relative novelty of the process and
to a range of 10~26 for other ASEAN The growing sophistication of local the uncertainty in many areas that we
nations. The country needs to further corporates is an important driver for the are seeking to address. The only certainty
invest in education and training to ensure economy and plays as big a role as FDI. is that these and other developing areas
that its workforce has the skills needed to As a bank that has had a presence in the will unfold and develop in ways that we
meet the requirements of foreign investors. market for over 150 years, we have seen cannot accurately forecast today. As a
In addition, Vietnam’s logistics per- and accompanied the strong evolution of result, the ambition and details around
formance index also lags behind China, local corporates. As they become more implementation in this transition plan
Malaysia, and Thailand, with gaps seen in sophisticated, they demand more sophis- will need to evolve over time. Rather than
logistics capacity, delivery time, and trace- ticated banking products and solutions wait for these areas to become clear, we
ability, etc. Logistics infrastructure currently to their needs. We have the ability with have chosen to lay out and pursue the
falls short of reaching international stan- our investment banking teams out of plans we have today, based on currently
dards, and road transport commands a 74 both Hong Kong (China) and Singapore available data, infrastructure, resources,
per cent share of overall transport means, to bring the latest products and structuring technologies and standards. Our transition
while demand is actually skewed towards capabilities to the market. plan will form the basis of further work
sea transport and adequate port space What helps us get ahead of the com- on our journey to net-zero over time, and
that supports Vietnam’s export story. petition is our Middle Market Enterprise we expect to review and update it period-
Regulatory navigation also continues (MME) strategy, where we aim to support ically, but at the end of the day we all need
to be a critical consideration for investors those rapidly-growing companies that to start somewhere and even the longest
looking to invest in Vietnam. According will one day become the next significant journeys start with a few small steps. %

en.vneconomy.vn April 2024 Vietnam Economic Times 31