10:48 | 24/03/2015 Economy
US-owned Intel Corporation recently announced plans to expand production in Vietnam to enable it to produce most of its chips here.
Haswell is Intel's codename for the fourth generation of processing chips found in nearly every laptop, desktop and mobile phone.
The company plans to produce 80% of CPUs for the global market in Vietnam by mid-2015, Sherry Boger, general director of Intel Products Vietnam, said.
In preparation for the expansion, the company has sent 105 Vietnamese engineers to its Malaysian factory for training.
Oil and gas giant Exxon Mobil Corp is preparing to make a massive investment in a gas-fired power complex in Vietnam.
Exxon is interested in investing in a gas field, a pipeline to bring the gas to shore and a processing plant, Hau was quoted by Bloomberg as saying.
Talking about the reason for the trend of expansion by US firms, Nguyen Mai, chairman of the Vietnam Association of Foreign Enterprises, said that country is boosting investment abroad again amid a strong economic recovery.
Its economy is forecast to grow at 3.1% this year after 2.4% growth in 2014, according to the New York Times.
The trend is also attributable to a shift by US companies from China, where labor costs are rising, to Southeast Asian nations, including Vietnam, he said.
The TPP is expected to throw up more opportunities for Vietnamese firms to expand investment in the US.
Scott Thomas of Wolverine Worldwide, an American footwear manufacturer, said 75% of the company’s inputs come from China, but that would fall to 33% by 2020. Vietnam, which now supplies 14.5% of the inputs, would then fill the gap, he added.
Wages in Vietnam are equivalent to just 38% of that in China though workers here offer the same productivity and even higher skills in certain fields.
Being the country with the largest investment abroad in the past several years, the US is likely to become the top investor Vietnam, Mai, chairman of the Vietnam Association of Foreign Enterprises, said.
According to the 2015 ASEAN Business Outlook survey by the American Chamber of Commerce in Singapore that polled nearly 600 US firms, Vietnam is the second priority market for US firms’ future business expansion after Indonesia.
Two thirds of the surveyed firms expected profits to increase in 2014, and this rose to 82% for 2015.
Corruption was their biggest concern, with 69% of the firms saying they were not satisfied with the issue in Vietnam.
Mai said: “Corruption has affected Vietnam’s FDI inflows. If it is not resolved, Vietnam will become less attractive to foreign investors.
“Attracting investment from the United States is very important in the context that we want to attract higher quality projects. Obviously, corruption can be found everywhere in the world, but we should make more efforts to reduce it.”
The growth in US investment in Vietnam is not commensurate with the trade between the two sides, he said. Of the Association of Southeast Asian Nations (ASEAN) member countries, Vietnam is the US’S biggest trade partner. Trade between the two countries was worth some US$35 billion last year.
Vietnam ranked behind Singapore, Thailand and Indonesia in attracting US investment. By the end of last year the US, with nearly US$11 billion in registered capital, was the seventh biggest out of 101 countries investing in Vietnam, according to the Foreign Investment Agency.
“Initial interest from potential foreign investors too often does not materialize due to continued problems with corruption, human resource constraints, and the country's overly-complicated, restricted, and unclear licensing and regulatory environment,” Gaurav Gupta, chairman of the American Chamber of Commerce (Amcham) in Vietnam, said.
AmCham members look to the government to foster a more competitive environment where decisions are made faster and legal procedures are less complicated, rules are fairly enforced, and companies compete on their merits -- including for access to capital, land and opportunities, he said.
Source VOV News