VIETNAM SME DEVELOPMENT – STATUS & PROSPECTIVE

Macro economic environment SME profile & Definition SWOT analysis SME positioning

OUTLINE OF THE PRESENTATION

Official name: The Socialist Republic of Viet Nam

Area: 331,041 sq km (60 provinces & 4 major cities):

Population (million): 86,02 4 (2009)

Population growth rate: 1.06% (2009)

Labor forces: 47,743.6 million (2009)

Unemployment rate: 4.60%(2009)

GDP growth rate: 5.32% (2009)

GDP per capita: 1,064 (2009)

GDP at current price ($m): 91,530 USD(2009)

Inflation rate: 6.8% (2009)

HDI (UNDP ranking out of 177 countries): 105 (2008)

VIETNAM AT A GLANCE1. Macro economic environment

1986 2007 2010 2020

Open door policy

WTO member

Industrialized country

Away from low-

income country

*500,000 businesses registered by 2010

*Market economystatus granted after 12 years

2015

AEC

2005

China-ASEAN

FTA

Law on enterprises

2009

Vietnam acceded

to ASEAN

1995

*1.1100,000 businesses registered by 2015

Vietnam's main export markets in 2009

EU20.40%

Other6.93% China

10.67%

US24.69%

Japan13.68%

ASEAN18.68%

Australia4.95%

Other

China

US

Japan

Australia

ASEAN

EU

Vietnam's main importers in 2009

Other21.74%

EU9.58%

ASEAN22.70%

Australia1.73%

Japan12.27%

US4.95%

China27.02%

Other

China

US

Japan

Australia

ASEAN

EU

12.1%

10.2%

11.7%

9.7%10.3%

46.0% TaiwanJapanKoreaSingaporeMalaysiaOthers

19.0%

50.6%

8.5%OthersIndustryHotels & TourismReal estates

FDI by country & sector(Total as of November 22, 2009 by registration capital)

VIETNAM SME DEFINITION

STRATEGY

-People-Properties-Processes-Products

-STEEEP-Competitors & Collaborators

TRENGTHS

Entrepreneurship, resilience Capacity for innovation Competitive labor costs State of cluster development Coperation in labor-employer relations Abundance of young and adaptive labor forces Sense of social responsibility

EAKNESSES

Low starting point of development Lacks of skilled labors and high quality human resources Lacks of long-term strategic vision Lacks of linkages among sectors Lacks of cooperative sense Dependency on state protection and subsidy

PPORTUNITIES

Most products subject toTariff reduction to 0 – 5% under AFTA

More selection to tap the resources from overseas markets Trend for shifting manufacturing bases of foreign companies to

Vietnam

HREATS

Uncertainty of global market economy Cut throat competition Level playing field Non-tariff barriers raised Middle-income trap

TRENGTHS EAKNESSES

PPORTUNITIES HREATS

Firm strategy, structure and rivalry

Factor condition

Demand condition

Related and supply industry

Figure 3-1 The determinants of national advantage

Asia Pacific as a Resource Base(Source: Strategies for Asia Pacific /Beyond the Crisis/Philippe Lasserre and Helmut Schuette/

Sourcing Cost Customer Adaptation

Service Technology

Raw Materials Labor

Components Logistics

Market Intelligence

Contacts

Financing New Processes

Japan

SingaporeKoreaIndonesia

ChinaThailand

Malaysia

TaiwanPhilippines Hong Kong

Flexibility Speed New Materials

Vietnam

SME POSITIONING

Thank you for your kind attention !

Ease of... Doing Business 2010 rank

Doing Business 2009 rank

Change in rank

Doing Business 93 91 -2

Starting a Business 116 109 -7

Dealing with Construction Permits 69 67 -2

Employing Workers 103 100 -3

Registering Property 40 37 -3

Getting Credit 30 27 -3

Protecting Investors 172 171 -1

Paying Taxes 147 140 -7

Trading Across Borders 74 73 -1

Enforcing Contracts 32 39 +7

Closing a Business 127 126 -1