17:09 | 22/04/2021 Cooperation
(VEN) - A newly published report points to significant opportunities for Vietnam to attract investment capital from Pacific Rim countries that are signatories to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The report by the Australian Embassy and the Vietnam Chamber of Commerce and Industry (VCCI) reviews the first two years of the trade deal’s implementation starting in January 2019.
|Vietnam is offering opportunities for investors by creating a stable, friendly business environment|
According to the report, Vietnam’s attraction of foreign direct investment (FDI) from CPTPP member countries was modest in the first year of the agreement’s implementation. Data from the Ministry of Planning and Investment showed that in 2019, the number of newly licensed foreign investment projects increased more than 13 percent compared to 2018.
While the 2019 investment of almost US$9.5 billion from CPTPP countries was nearly 36 percent lower than the previous year’s, this was due to the surge of 2018 foreign capital from Japan for Sumitomo Corporation’s US$4.1 billion Smart City project in the capital Hanoi. That investment alone accounted for almost 30 percent of all FDI Vietnam attracted from CPTPP countries in the same year.
As a result, new capital registered a comparative decline in 2019, with the average value of a new FDI project from CPTPP countries decreasing 56.9 percent, from nearly US$11 million in 2018 to US$4.7 million per project in 2019. CPTPP-related institutional and market opening commitments apply to the long term and do not have an immediate impact on FDI inflows.
Although FDI from CPTPP countries decreased 36 percent, total FDI capital attracted by Vietnam in 2019 increased over seven percent.
According to the report, FDI attraction from CPTPP countries increased in 2020, reaching US$11.8 billion, up 24.4 percent from 2019. In all, Vietnam attracted US$28.5 billion in FDI capital last year, down almost 25 percent compared to 2019 due to the Covid-19 pandemic.
|David Gottlieb, Counselor for Economic and Development Cooperation at the Australian Embassy in Vietnam, gave a speech at a recent conference reviewing two years of CPTPP implementation|
Surge in Q1 foreign investment
According to data from the Ministry of Planning and Investment’s Foreign Investment Agency, in the first quarter of 2021, Vietnam attracted US$10.13 billion in FDI capital, up 18.5 percent from the same period last year. Two CPTPP countries, Singapore and Japan, topped the list of foreign investors in the first quarter, with Singapore investing US$4.6 billion (accounting for 45.6 percent of the total) and Japan US$2.1 billion (20.8 percent of the total).
Economists say Vietnam is offering opportunities for investors by creating a stable, friendly business environment.
David Gottlieb, Counselor for Economic and Development Cooperation at the Australian Embassy in Vietnam, underscored the importance of utilizing digital technology in the context of the Covid-19 pandemic. He recommended that Vietnam seek to take advantage of the opportunities brought about by the CPTPP to increase digitalization.
According to Gottlieb, the Covid-19 pandemic presented a range of unprecedented challenges to the principles of free trade and market openness. Fortunately, CPTPP members such as Australia and Vietnam responded well to the pandemic and were still able to fulfill their commitments to rules-based trade whilst maintaining open supply chains which provide positive and transparent information.