06:00 | 04/07/2020 Economy
(VEN) - With abundant high quality human resources, a large number of quality suppliers, and strong commitments to providing land for investors in industrial parks, improving the business environment and simplifying administrative procedures, Ho Chi Minh City (HCMC) has become the third biggest foreign direct investment (FDI) attractor in Vietnam.
|Ho Chi Minh City has prepared land with infrastructure to attract investment. Photo: Thanh Thanh|
Top-3 FDI attractor
According to the General Statistics Office of Vietnam (GSO), HCMC attracted an additional US$1.6 billion worth of FDI in the first five months of 2020, ranking third nationwide, after the Mekong Delta province of Bac Lieu that lured US$4 billion in the same period and the southeastern province of Ba Ria-Vung Tau (more than US$1.9 billion). The US$1.6 billion included US$248.6 million worth of registered capital of 450 newly licensed projects, US$122 million worth of increased capital of 80 projects, and more than US$1.23 billion that foreign investors contributed or used to buy shares of businesses in the city.
The trade sector was the biggest FDI attractor with 207 projects worth US$131.7 million, accounting for 52.9 percent of the newly licensed capital, followed by science and technology with 93 projects worth US$21.4 million (8.6 percent), processing and manufacturing industries with seven projects worth US$9.5 million, and real estate - six projects worth US$44.2 million (17.8 percent).
In the first five months, Japan became the largest foreign investor in HCMC with 44 projects worth US$80.5 million, representing 32.4 percent of the total, followed by Singapore with 70 projects worth US$50.8 million (20.4 percent), and Hong Kong (China) with 37 projects worth US$31.5 million.
Hirai Shinji, Japan External Trade Organization (JETRO) Chief Representative in Ho Chi Minh City, said Japanese investors chose Thailand three years ago, and they now have chosen Vietnam. This trend of investment will continue over the next few years, with investment not only concentrated on manufacturing but also the service sector.
According to Japan’s Nikkei news agency, in the early fourth quarter of 2020, Panasonic will start closing down its biggest household electronics factory in Thailand to shift it to Vietnam, targeting to restructure production and reducing costs by almost US$930 million by 2022.
Large-scale billion-dollar projects of major corporations including Intel, Samsung, Mercedes, Isuzu, and Nidec, among others, are exemplary models of high quality foreign investment, which have helped transform the city’s economic structure and attract more investment to the city.
Infrastructure and business environment improvement
Stephan Pudwill, Executive Vice Chairman of the Board of Techtronic Industries Company in the Saigon Hi-Tech Park (SHTP), said the company chose SHTP, as the city has strong commitments to working with investors and the park has a strategic location, near the center, leading universities, convenient connectivity with logistics and infrastructure systems, and many high quality suppliers.
HCMC has prepared land on which infrastructure can be built to serve numerous investors in industrial parks. Seventeen of the 19 export-processing zones and industrial parks in the city have gone into operation, leasing almost 1,800ha or 68.4 percent of the 2,500ha of industrial land to investors. The city is speeding up investment in some industrial parks including the 200ha Vinh Loc 3 Industrial Park in Binh Chanh District, and a project to expand the Hiep Phuoc Industrial Park by 392.89ha. Under the plan, HCMC will have 23 export processing and industrial parks totaling 5,797.62ha in area later this year.
Further investment attraction is expected to be difficult due to the Covid-19 pandemic. Efforts to improve the city’s investment environment, maintain macroeconomic stability and efficiently control the pandemic are very important for the city to attract foreign investment.
The city has established and operated an investment working group chaired by People’s Committee Chair Nguyen Thanh Phong to shorten the investment licensing process by at least 50 percent.
The city has committed to addressing all business problems, and businesses can have their proposals sent and handled through the city Department of Planning and Investment.
|Ho Chi Minh City has been promoting FDI attraction and assisting enterprises to improve operations and investment efficiency in order to develop important industries, help business solve problems and diversify solutions to attract investment shifted to Vietnam from other countries once the pandemic is controlled worldwide.|