KUALA LUMPUR: The Vietnamese business landscape continues to offer investment opportunities, with its economy being powered by a growing young population and a government that seeks foreign investment.

In a HSBC business confidence index conducted in June, it was discovered that businessmen in Vietnam are the most confident in Asia, and the second most confident in the world.

"Vietnam has become an economic hotspot in Asia, attracting international investors in several sectors including agriculture, infrastructure, energy, transport, finance and banking. The country can and should be the new engine to power the South East Asian economy," said president of the Chinese Chambers of Commerce and Industry of Kuala Limpur and Selangor Tan Sri William Cheng.

He was speaking during his opening address for Activate Asia: Vietnam In View conference organised by HSBC Bank.

Vietnam's economy has been growing at an average of 7% in the last 10 years and is likely to grow 6.4% this year.

On the downside, it's budget deficit remains high at about 5.7% and has an inflation rate of about 10%.

"Key business opportunities are in Vietnam's strategic retail market, and setting up manufacturing and export bases. Retail spending now contributes 42% of Vietnam's gross domestic product," said HSBC Bank (Vietnam) Ltd senior vice-president and head of commercial banking, Huynh Buu Quang.

Vietnam's robust retail market can be attributed to Vietnam's young population which is growing both in numbers as well as affluence.

Presently, 65% of its total population of 86 million people are below 35 years of age.

"Vietnam's biggest asset is its people. In a trade off between a learning opportunity and making money, the Vietnamese will choose learning opportunity," said HSBC Bank Malaysia Bhd managing director commercial banking, David Morton.

"It is their amazing work ethic, the raw intellect, good computer skills and high productivity that makes the Vietnamese such good workers," said Morton.

He added that the Vietnamese government has been extremely pro-business and pro-investment in its stance.

However he cautioned that it was extremely important to look for the right partner in Vietnam when setting up business.

To date, since Vietnam opened up its economy in 1986, total foreign direct investments from Malaysia to Vietnam is RM18.06bil.

It's major export items include commodities like rice, coffee and pepper. Vietnam's per capita income currently stands at US$1,200.

Huynh sees opportunities for Malaysian companies to invest in the infrastructure, spare parts and machinery sectors.

Infrastructure is now the weakest link for Vietnam, especially with its underdeveloped port system. This is presently a key area of focus for the government.

"Vietnam is looking to spend some US$3.7bil in infrastructure and transport. This could be an opportunity for small and medium enterprises (SME) in Malaysia to create significant value. These SMEs need to look beyond the domestic market to grow," said HSBC Bank Malaysia Bhd deputy chairman and CEO and global CEO of HSBC Amanah, Mukhtar Hussain.

- The Star Online