Financial Market Study for Taiwanese Businessmen in Vietnam

In view of increasing labor costs and emerging environmental concerns, Taiwanese businessmen in labor intensive indusrties had to look to neightboring countries, triggered by the 1987 strong appreciation of Taiwan dollars, for cheaper solution to survive in 1990. China became the most popular destination, attracting most of the investment capitals from Taiwan in nearly two decades. But a growing number of Taiwanese corporations are pursuing a strategy to establish or expand their bases outside China, particularly in Vietnam to mitigate the risks of overdependence on factories in one country, let alone the promulgation of China’s New Labor Law in January 2008 that indicates doing business in China is likely to get much more expensive in the coming years.n order to emulate China’s success on the economic reform and achievement, Vietnam has opened up its door to foreign investment since 1988 attracting tens of billions of US dollars cash inflow. The country has been shifting toward a more market-oriented economy which continues to expand at an annual rate in excess of 7 percent in the past 10 years. In the wake of rapid economy growth, fueled by the enormous inflow of foreign investment combined with relatively free local money supply, led to an overheating of the economy and the government was too slow to respond in late 2007. Government policy is moving to curb inflation from loose monetary policy by applying a series of measures including public spending cuts, price controls, interest rate increases and credit control. The banking system ran into difficulty in terms of liquidity. Enterprises, individuals and households were in desperate need for capital but banks were very restrictive to grant loans.n the face of Vietnam’s tightening monetary policy, what obstacles have Taiwanese businessmen faced to access to bank loans at the soaring interest rate? What assistance they need to get over the financial turmoil? This study is tried to figure out financial market status quo for the Taiwanese businessmen in Vietnam, and hopes to indicate possible roadmap for newcomers and even the Taiwanese Financial Institutes（FI）. n accordance with the purpose of this study, an intensive survey with more than 50 questions was conducted to the members of『Taiwan Businessman Association in Vietnam』covering reasons to select local FIs, difficulties when dealing with local FIs, formation of chartered capitals, obstacles to obtain bank loans, anticipation on services from local FIs , impacts from tightened monetary policy etc. In addition, this study hopes to learn the prioritized importance of different types of loan, and anticipated items to be freed by Vietnam government. his study proposes possible measures by the Taiwanese businessmen encountering volatile market situations, business wise and finance wise. Meanwhile, possible business opportunites and feasible future focus for the Taiwan FIs are advised as well.