It is behind only the United Arab Emirates and India among key economies in the Asia-Pacific, Middle East, Latin America, North America, and Europe.

The survey polled 5,120 trade-oriented small and mid-market enterprises about trade volume, buyer and supplier risks, the need for trade finance, access to trade finance, and the impact of foreign exchange and government trade regulations on their businesses.

Overall, trade confidence globally has remained positive since the index was launched in the first half of 2009. Over half of those surveyed, including those in the UK, the US, Canada, and Germany, are bullish about trade volumes.

Viet Nam’s outlook on trade prospects saw a big improvement, with the country scoring 132 on a scale of 200, up from 110 in the last poll done in the second half of 2009.

The majority of respondents (75 per cent compared to 65 per cent last year, one of the highest proportions in any country surveyed) expect their trade volumes to increase in the next six months.

A small percentage – at 4 per cent, down by half – said they anticipate volumes to decrease.

Globally, most respondents do not expect buyer – and supplier-related risks to increase. Vietnamese traders also share this optimistic outlook as a higher proportion believes that the risk of buyers defaulting on payment will decrease (up to 24 per cent from 7 per cent).

There is a significant jump in the percentage (over three-fold) of Vietnamese respondents who think that the risk of suppliers not honouring agreed trade arrangements will decrease. The majority of the respondents think the key reason is that the financial health of suppliers is improving (62 per cent).

With more confidence in trade volume and a better outlook on buyer-supplier risk, the number of Vietnamese traders who said the need for trade finance would increase also rose to 74 per cent from 66 per cent.

It was followed by India (60 per cent) and the Middle East (51 per cent).

Australia scores higher but remains the market with the least number of respondents (19 per cent) expecting their trade finance needs to increase.

One of the highlights of the survey is the decrease in the number of traders (to 51 per cent from 80 per cent) expecting exchange rates to have an unfavourable impact on their business in the next six months and the increase in the number who think exchange rates will have a favourable impact on their business (up to 29 per cent from 17 per cent).

More respondents expect government trade regulations to have a favourable impact on their business growth (28 per cent) than in the last survey (9 per cent).

Despite a big decrease in percentage (down to 48 per cent from 81 per cent), respondents say the fluctuating exchange rate is the biggest barrier to import/export business growth, followed by the cost of shipping, logistics and storage (40 per cent), government trade regulations (40 per cent), and rising interest rates (38 per cent).

Vietnamese traders still consider Greater China the most important region to trade with, as the majority of Viet Nam exporters and importers (52 per cent) continue to actively trade with it, followed by Southeast Asia (33 per cent), and the rest of Asia (28 per cent).

But the number actively trading with Greater China has decreased (to 52 per cent from 64 per cent) and Southeast Asia overtook the rest of Asia to become the second biggest market.

In the rankings for the most promising regions for trade growth, the percentage considering Southeast Asia to be a promising region rose to 19 per cent from 14 per cent. For Greater China, this number plummeted to 9 per cent from 36 per cent.

Do Thuy Nhu Thuy, head of the trade and supply chain at HSBC Bank (Vietnam), said: "The survey results closely reflect the market changes during the last six months as well as represent the optimistic outlook for Viet Nam’s economy in the next six months.

"More Vietnamese traders expect higher trade volumes, more trade activities, and a greater need for trade finance as Viet Nam and Asia have recovered strongly.

"We are pleased to see that for the first time, Vietnamese traders are less worried about the impact of exchange rates on their business though they still see it as their main challenge in terms of growth.

"This means that they constantly look at exchange rate as a risk to be managed to succeed rather than to fear as a growth barrier," she said.

Source: VietNamNet/Viet Nam News