14:12 | 11/08/2017 Economy
(VEN) - Japan established diplomatic relations with Vietnam in September 1973 and has become an important partner in a wide range of fields, especially investment. Economists believe Vietnam still has much room for Japanese foreign direct investment (FDI).
Over US$46 billion registered
For a long time Japan topped the list of foreign investors in Vietnam in terms of both registered capital and number of projects. For the last three years, however, Japan has lagged behind South Korea. But in the first half of this year, Japanese FDI in Vietnam increased strongly, and Japan regained its position as Vietnam’s largest investor.
Statistics from the Ministry of Planning and Investment’s Foreign Investment Agency show that by the end of June 2017, Vietnam had attracted 23,594 FDI projects with total registered capital of more than US$306 billion from 120 countries and territories. These include 3,443 Japanese FDI projects with total registered capital of US$46.1 billion, accounting for 14.5 percent of total number of projects and 15.06 percent of total amount of registered capital. Based on these results, Japan ranked second among foreign investors in Vietnam, behind South Korea.
In the first six months of this year, Vietnam attracted US$19.22 billion of FDI from 94 countries and territories. This included US$5.08 billion of Japanese FDI, accounting for 26.45 percent of the total, moving Japan ahead of South Korea.
Attracting more Japanese FDI
According to the Ministry of Planning and Investment, Japanese FDI projects in Vietnam are compliant with Vietnamese laws and policies, contribute significantly to Vietnamese support industries and have positive impacts on Vietnam’s socioeconomic development. Typical examples include investments by carmaker Honda.
The Vietnamese government has focused great efforts on attracting Japanese investors. This was why Hiroshi Karashima, President of the Japan Business Association (JBA) in Vietnam, was invited to co-chair the Midterm Vietnam Business Forum 2017 (VBF 2017) that took place recently in Hanoi.
According to Vietnam Chamber of Commerce and Industry Chairman Vu Tien Loc, this was the first time JBA participated in the VBF as a co-chair of the event.
Hiroshi Karashima said that JBA currently has 1,600 members, and that Japanese investors in Vietnam highly appreciate the investment environment in the country.
A report on Japanese business trends shows that nearly 70 percent of surveyed Japanese companies proved willing to further invest in Vietnam.
However, at VBF 2017, JBA indicated some problems facing Japanese investors in Vietnam. These include the underdevelopment of support industries and the inconsistency of laws and policies. JBA asked that the Vietnamese government further improve the investment environment in order to facilitate Japanese investment.