Trade

35% of Japanese multinationals operated at a loss in Vietnam in 2017

According to the results of a survey taken by the Japan Trade Organization more than 35% of Japanese multinational companies operating in Vietnam reported losses for 2017, according to the VNExpress newspaper.

In an article written by Ha Thu on Feb. 7, VNExpress attributed the losses to the confusing legal system in Vietnam, complicated tax and administrative procedures, and the poor labor force.

Out of 650 companies interviewed more than 1 out of every 3 said they lost money for the year, which is an absolutely horrible figure and — if it were true — would mean serious problems for the Vietnam economy.

The survey results showed the language barrier remains a big challenge, said VNExpress, which comes at no surprise to anyone.

Vietnamese, with the exception of a relatively small group of individuals, cannot speak any language other than Vietnamese and it is virtually impossible to communicate with them in either English or Japanese.

The problem stems from an extremely poor education system in which unqualified Vietnamese teachers attempt to teach foreign languages such as English, when in fact they cannot speak or write the language.

Just like in this article, Mr Thu said Japan poured $9.11 billion of foreign direct investment into Vietnam last year, which is a completely false statement.

Mr Thu has no clue whatsoever how much money  Japan actually invested in Vietnam in 2017.

The problem stems from his total lack of English proficiency and the fact that he does not know what foreign direct investment is, nor does he know the definition of poured, and thinks it’s the amount of money that multinationals may expend at some future date in Vietnam.

So one can see how messy the language problem gets in Vietnam. Vietnamese try to transfer grammar rules, syntax, and so on, from their native language to foreign languages and the result is complete garbage.

So, there is certainly no need for alarm, as there probably is absolutely no truth in the statement that 1 out of every 3 Japanese companies lost money.

Rather than take a survey, it may have made better sense to look at the companies audited financial statements. In the accounting field, answers to questions are not considered evidence, unless they can be corroborated.

Since there was no corroboration, nothing in the article by VNExpress should be considered valid, as it amounts to nothing more than hearsay.

These companies all prepare financial statements, and the purpose of audits is to validate the data, so that one can rely of them for making informed well-reasoned decisions.

 

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