Vietnam'S Financial Crisis Is At Hand.

In recent years, a large number of foreign companies have poured into Vietnam, most of them are clothing and footwear manufacturers. The rise in the cost of labor and operation in mainland China has prompted them to go to Vietnam.

Last year, foreign-invested enterprises applied for $20 billion in Vietnam, which is 1/3 higher than that in neighboring Thailand.

According to the financial times, Vietnam's American Chamber of Commerce has called on the Vietnamese government to act quickly to restore macroeconomic stability at the annual meeting of the Vietnamese government and foreign business in June 2nd.

The choice of setting up factory production in a certain area depends on not only the low cost of the local land and labor, but also the stability of the local economy, and the high cost of other industries, including strike.

Now it seems that many factors such as high inflation and so on make Vietnam likely to be on the edge of the economic crisis, and the manufacturing factories pferred from mainland China to Vietnam are also facing huge operational risks.

There are many unstable phenomena in the financial field of Vietnam. The inflation is serious, the stock market is falling down, the Vietnamese shield is weakening along with the US dollar, and there is a large number of international capital flight.

This series of phenomena makes people worry that a financial crisis similar to the one that broke out in Thailand at the end of twentieth Century and spread to several countries is going to rewind Southeast Asia?

Faced with such a difficult situation, some of the Chinese enterprises in Vietnam have to lay off workers in a big way.

Vietnam shield devaluation

"The situation here is hard to feel at home," he said to reporters after the manager of a large motorcycle parts manufacturer in Vietnam, Hanoi branch.

Vietnam's inflation rate has hit a 25% high in May.

According to the reporter's manager, the inflation rate of 25% does not include soaring prices of grain, oil and electricity, because the Vietnamese government has promised to control the prices of these three areas before June 30th, and there will not be any big fluctuations. After June 30th, these commodities will also be handed over to the market as determined by other commodities.

At present, some Vietnamese have begun to hoard rice.

But compared to rice, people are more willing to buy, but also more difficult to buy, that is, the dollar, because with the domestic inflation, the Vietnamese shield's huge devaluation in the foreign exchange market.

In the near future, the Dong shield will depreciate by 5~7 percentage points per day. "This figure means that when people get the Vietnamese shield, they will have to run for dollars, slow down, and the money in their hands will be even less valuable."

The manager described it as follows.

Due to the rapid devaluation, Hanoi now releases an exchange rate against the US dollar every hour.

In addition to the US dollar, the renminbi has become the "hard currency" entrusted by Vietnamese in the crisis.

But now banks are extremely short of dollars and Renminbi.

"If you exchange dollars today, you will have to wait in line for 15 days before you can make a successful exchange. At that time, the Vietnamese shield did not know how much it was devalued."

The manager talked about it.

He also said that the amount of money exchanged by ordinary people was relatively small, while some European, American, Japanese and Japanese enterprises began to exchange large amounts of dollars through the black market.

Correspondingly, Vietnam's stock market has also shrunk dramatically, and the stock market value of the Hanoi stock exchange has decreased by 45% this year.

Yang Baoyun, a University of International Relations professor at Peking University, believes that due to excessive foreign investment in the past few years, Vietnam's stock market is too high.

With the emergence of inflation and exchange rate depreciation, a large number of foreign investment fled the Vietnamese stock market into the abyss.

Chinese enterprises are struggling to support them.

At present, the vast majority of Chinese enterprises are in the wait-and-see view of the economic trend. The strategy adopted is to control costs through various means, including layoffs and business reduction.

The journalist who interviewed the manager of the Hanoi company has laid off 70% of its employees, 30% of whom are Chinese employees, who have basically returned to the country, and the other 40% are Vietnamese employees.

However, Vietnamese workers did not react collectively to the layoffs, because they also knew that this was the general trend that forced them to compete.

Corporate layoffs are also helpless.

"The company can only maintain the smallest business items at present, such as providing some services for the old customers."

The manager told reporters, "this year's market demand is only 30% of the same period last year, and the market is still shrinking.

In addition to food and the necessities of life, we seldom buy anything else, and money is more inclined to exchange dollars or RMB.

Relative to the market shrinkage, it is the soaring price of raw materials, so it is very difficult for enterprises to control costs if they start operation. "

And even if there are businesses, many businesses are reluctant to do so.

Because the goods sold, the Vietnamese shield is recovered, and the exchange can not go out. The enterprise is equal to taking a pile of waste paper in hand.

Therefore, most Chinese funded enterprises are at a stage of "Inaction".

Asked about future strategies, the manager predicted that the financial turbulence in Vietnam would last for 2~3 years.

If this situation continues, the company's business will further shrink in the future and the staff will be further reduced.

If the market is depressed for a long time, it is possible that only a small number of people will be "watching" in Vietnam.

The possibility of complete divestment of Chinese enterprises is relatively small.

Because in the first two years of Vietnam's rapid development stage, many Chinese enterprises have stepped in and bought factories and equipment.

Real estate prices in Hu Zhiming have fallen by 50%, while Hanoi is slightly better, but it has also fallen by 20%.

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