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Vietnam is the most promising destination for Japanese companies

Thursday 09, 01 2020
Vietnam has been rated by Japanese companies as the most promising place in Asia to invest in 2020, alongside India and other Southeast Asian countries, a survey showed.
Vietnam is the most promising destination for Japanese companies

The survey result

In the survey, conducted online from November to December 2019 by NNA Japan Co., a company of Kyodo News, Vietnam received 42.1% of the 820 valid responses for Asia's most promising investment destination, based on factors such as the potential of a growing market and a large supply for low-cost labor. NNA is a news agency providing economic and business reports for Japanese companies operating in Asia.

Other survey respondents, targeting foreigners working for Japanese companies in Asia, argue that their choice is because Vietnam is close to China.

India ranked second at 12.2%, with expectations for growth and potential markets as a door to the Middle East and Africa.

Myanmar has increased three points from the previous year to the third position with 11.6%, while Indonesia ranked fourth with 6.6%.

China, seemingly losing its appeal as an investment site, due to concerns about the trade war with the United States and rising labor costs, came in fifth at 5.1%.

Vietnam is the most promising destination for Japanese companies

The current cooperation situation

Mr. Tamotsu Majima, Senior Director of Japan's leading M&A consulting service - RECOF Corporation said the number of transactions between Japanese enterprises in Vietnam has reached a record. Out of 20 - 25 transactions in the past 4 years, 21 transactions were carried out in July 2019. Japanese companies are increasingly interested in Vietnam, especially in production and services.

>> Top 10 M&A deals in 2019

The reason is that the economies of Japan and Vietnam are getting closer and closer, more and more Vietnamese people are traveling to Japan and vice versa. On the other hand, the Vietnamese labor force participating in Japanese economic activities is increasing, Japanese people are getting used to recruiting many Vietnamese human resources.

According to Masataka Sam Yoshida, CEO of RECOF, Japanese companies are investing heavily in Vietnam in part due to the need for manufacturing competition due to prolonged US and China trade tensions.

In addition, the growing Vietnamese economy also attracts Japanese retailers to invest in consumption, business goods, and many other industries.

In 2019, many notable transactions were made: Taisho Pharmaceutical Joint Stock Company bought shares of Hau Giang Pharmaceutical; Misui Corp bought shares of Minh Phu Seafood, Sumitomo Corp planned to buy shares of Gemadept ...

"In the coming years, the Japanese economy is forecasted to slow down, but the investment activities of Japanese enterprises in Vietnam will not diminish. Despite being under increasing pressure from other countries such as Korea, Thailand, and Singapore, Japanese businesses will continue to invest in consumer goods, industry and health care, real estate, construction, logistics, finance in Vietnam," said Masataka Sam Yoshida.

>>> Vietnam ranked in the top 7 in exporting goods to the US

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