Half of respondents plan to expand in the country over the next 12 months even though confidence in the Asia-Pacific region has taken a hit.
Just 28 percent of CEOs in the region are “very confident” in revenue growth in 2016, according to the Asia-Pacific Economic Cooperation (APEC) CEO Outlook survey conducted by PricewaterhouseCoopers.
Vietnam, however, remains an attractive option, together with China and Indonesia.
Over the next 12 months, more than half of the respondents believe that investment in Vietnam will increase thanks to its population of over 90 million and its rapid growth of income per capita. Responses came from 800 CEOs operating in the 21 economies of the APEC region.
For many CEOs, free trade agreements will support small and medium-sized enterprises and provide a path to growth for the region.
“The best thing you can do for SMEs is to remove trade restrictions. The more we can trade, the more companies benefit,” said Mike Smith, CEO of Australia and New Zealand Banking Group Limited.
However, some have warned that lowering barriers to trade and foreign investment may do more harm than good to SMEs, arguing that free trade may intensify the competition between SMEs and global firms.
In Vietnam, 97 percent of the companies are SMEs, so with the door opened under free trade agreements, they have to compete with foreign companies, said Hoang Van Dung, chairman of Vietnam APEC Business Advisory Council, calling this “the biggest challenge.”