Vietnam hopeful about future Japanese investment

06:00 | 28/09/2020 Economy

(VEN) - Vietnam remains a strong draw for Japanese investors despite the impact of the Covid-19 pandemic as evidenced in the participation of hundreds of business representatives in an early September online workshop to connect Japanese and Vietnamese firms.

vietnam hopeful about future japanese investment
Japanese FDI in Vietnam keeps growing

Takeo Nakajima, chief representative of the Japan External Trade Relations Organization (JETRO) in Hanoi, told workshop participants that FDI flows to Vietnam, including Japanese investment, increased continuously until the end of 2019. Despite a slowdown since the beginning of 2020 due to the impact of Covid-19, FDI flows to Vietnam are forecast to recover after the pandemic is controlled.

Nakajima attributed Vietnam’s attraction for foreign investors partly to government policies creating favorable foreign investment conditions. Moreover, Vietnam has become a signatory of various free trade agreements, including the Vietnam-Japan Economic Partnership Agreement (VJEPA). In 2020, while many other countries are facing the risk of negative growth, Vietnam is forecast to be the only Southeast Asian nation to possibly maintain positive growth.

Japanese foreign direct investment (FDI) in Vietnam has increased continuously in recent years. In 2018, Japan topped the list of 112 countries and territories having investment projects in Vietnam, with US$8.59 billion, accounting for 24.2 percent of the total amount of foreign investment capital in the country. By the end of 2019, more than 2,000 Japanese companies had investments in Vietnam with registered capital of US$59.3 billion, accounting for 16.7 percent of all FDI in the country.

Not only large companies and groups, but also many small and medium Japanese enterprises have promoted investment in Vietnam. Japanese investment in Vietnam tends to reach other localities nationwide instead of being concentrated in Hanoi and Ho Chi Minh City.

According to Vu Ba Phu, Director of the Vietnam Trade Promotion Agency under the Ministry of Industry and Trade, Japanese investment and technology transfer will help improve the technological and manufacturing capacity of Vietnamese enterprises.

Vietnam will continue promoting institutional and policy improvements in order to enhance the effectiveness of FDI attraction, focusing on project quality, efficiency and environmental impact. Priority is given to projects using modern technologies and management methods that help Vietnam participate in global manufacturing and supply chains.

According to JETRO, 63.9 percent of Japanese companies in Vietnam are willing to expand operations in the country. This is the highest rate of its kind among ASEAN countries and the third in the Asia-Oceania region.

Thu Trang