10:02 | 01/08/2019 Economy
(VEN) - During a recent visit to Japan by Prime Minister (PM) Nguyen Xuan Phuc, Vietnamese and Japanese localities and businesses signed 32 investment certificates and memorandums of understanding (MoUs) on cooperation. Valued at $8 billion, these deals reflect the Vietnamese market’s attraction for Japanese investors.
Attending a Vietnam-Japan investment promotion conference in Tokyo, PM Nguyen Xuan Phuc affirmed that Vietnam considers Japan one of the most important strategic partners and encourages high-quality Japanese foreign direct investment (FDI) in Vietnam. Priority is given to environment-friendly projects in fields such as infrastructure development, high technology application and transfer, energy efficiency and renewable energy. Japanese companies are encouraged to cooperate with Vietnamese businesses in developing support industries and taking Vietnamese goods into regional and global distribution channels.
Once the recently signed Free Trade Agreement and Investment Protection Agreement between Vietnam and the EU comes into force, Vietnam’s exports to the EU are expected to grow about 20 percent by 2020 and 42 percent in the next six years. “This promises Japanese companies opportunities to contribute to Vietnam’s export growth. Vietnam will be a promised land for major Japanese groups,” PM Phuc said.
Japanese firms participating in the event expressed praise for Vietnam’s efforts to improve the business environment and solve investor problems, and affirmed their wish to contribute further to Vietnam’s socioeconomic development. “Japanese business trust in Vietnam keeps growing,” said Nobuhiko Sasaki, Chairman of the Japan External Trade Organization (JETRO).
Japanese business representatives noted that Vietnamese firms are still not able to supply all the support industry products required by foreign manufacturers and said they would like to help increase the localization rate in specific fields.
A shift of capital flows
Currently, Japan has 4,190 investment projects in Vietnam with total registered capital of US$57.9 billion, ranking second among countries and territories investing in Vietnam.
The latest survey conducted by JETRO showed that 65.3 percent of the 723 Japanese companies operating in Vietnam recorded high profits in 2018.
The majority of these companies listed market scale and growth as the greatest advantages of Vietnam’s investment environment. Other positive factors include low labor cost and political stability.
Survey participants listed Vietnam second among the most attractive destinations for them to expand operations in the future. They also chose Vietnam to promote exports and investment in non-production areas.
Foreign investment experts believe that in the next several years, Japanese FDI in services and trade will increase further.