The new quarterly HSBC Trade Connections world trade forecaster predicts Vietnam trade volume will grow by 144% to the end of 2025, from the current value of US$108.1 billion to US$282.5 billion. Egypt, India, Vietnam, Indonesia and mainland China are amongst the top five international powerhouses which will drive world trade growth until 2025.
Asia trade volumes is envisaged to grow 96% to nearly US$14 trillion by 2025 and will be the key driver of world trade growth which is predicted to increase by 73% in the same period.
|Mr. Huynh Buu Quang- Head of Commercial Banking, HSBC Bank (Vietnam) Ltd.|
The HSBC Trade Connections report also revealed Vietnam confidence index remains positive, ranking 7th in the global confidence index and 3rd in Asia confidence Index: 115 vs 116 first half of 2011(1H11). Asian traders reported a dip of 3 index points, in line with the views reported by global traders (-2 index points) from the 1H11, indicating that despite indications of long term growth, traders are expecting global economic headwinds to impact global trade over the next six months.
Noel Quinn, Regional Head of Commercial Banking Asia-Pacific, said: “International trade is set to increase despite current economic uncertainty; for businesses that are looking to grow, international trade is the real opportunity. Whilst traders recorded a dip in confidence levels for the next six months, companies must prepare themselves now for the expanding trade markets across the world and especially within the Asia-Pacific region. There are undoubtedly short term risks for businesses given the challenging economic conditions but some mitigation is possible if companies start preparing now to capitalise on the growth in global trade.”
The HSBC Trade Confidence Index, released today alongside the forecast, revealed that 41% of respondents in Asia expect the global economy to decline within six months, but the vast majority (83%) anticipate either an increase in international trade volumes, or consistent levels of international business activity. Indonesia became the most confident market globally while businesses in Singapore (-16), mainland China (-14) and India (-11) showed the largest drops in confidence, revealing a pessimistic six-month outlook amongst importers and exporters in these markets.
Businesses in Australia, Singapore, Vietnam and mainland China are concerned about buyers defaulting on payments and intend to request advanced payments or tighten payments terms from their suppliers. Across Asia, half of all traders expect to maintain the same level of trade finance whilst 40% expect to increase their financing requirements levels. Greater China continues to be the most promising region of growth for importers and exporters in Asia including Vietnam. Vietnam traders continue to take intra-regional trade as the main driver of trade.
China, the US, Japan, Singapore and Korea are Vietnam’s top five trading partners and it is anticipated trade with all of them will grow in volume terms over the next 15 years. China will remain Vietnam’s largest trade partner by value in 2025, increasing its total trade from US$17.9 billion to US$53.3 billion. Trade routes are emerging with Switzerland, Egypt, South Africa and Saudi Arabia that reflect the importance of commodities to Vietnam's trade base - particularly in iron and steel with Switzerland and petrol and oil with Saudi Arabia.
Asia-Pacific’s largest trading corridors are with mainland China, Japan, Korea and the US. The forecaster suggests that additional countries from within the region will also become major players, such as India, Vietnam, Myanmar and Cambodia who are developing strong export bases in increasingly higher-end value goods in manufacturing. Vietnam has three substantial, quickly developing trade corridors with Switzerland, India and the Philippines which reflect both the strength in commodities of the country and its integration into the global supply chain, particularly in consumer electronics.
Mr. Huynh Buu Quang- Head of Commercial Banking, HSBC Bank (Vietnam) Ltd., said:
“Vietnam will be among the top five international powerhouses that drive world trade growth until 2025. As an international bank that has great history in trade finance and unique strength of international connectivity, HSBC is best positioned to support Vietnam traders to explore the future of the world trade and opportunities for international businesses. We have been supporting the trade business in Vietnam since the very first date we set up our presence in this country. After more than 140 years of presence in Vietnam, we remain committed to working with Vietnam traders to steer through the difficult time and maximize the potentials of global trading trends."