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Vietnam urged to focus on FDI quality, not quantity

Vietnam urged to focus on FDI quality, not quantity

Sunday 13, 10 2019
Vietnam has been successfully calling for foreign direct investment (FDI) in the last 10 years, but in order to improve the quality of FDI projects, it needs new policies and technologies.

Vietnam has been successfully calling for foreign direct investment (FDI) in the last 10 years, but in order to improve the quality of FDI projects, it needs new policies and technologies.
The Business Forum cited an MPI report as saying that Vietnam has received many FDI projects in the last year, including those from big Japanese firms such as Sanyo, Matsushita, Sony, Fujitsu, Toshiba, Panasonic and Nidec. 

They have set up factories in Vietnam which apply advanced technologies, and are also considering pouring more capital to expand.

Investors from the US and Europe have also developed hi-tech projects. Intel, IBM, Cap Gemini and Accenture are seeking more opportunities in Vietnam.

More FDI capital has been flowing to hi-tech zones as well. Hoa Lac Hi-tech Zone in Hanoi has licensed 60 projects capitalized at VND31 trillion in total. Of the total, 29 projects have been implemented and 17 have been put into operation.
The Hi-tech zone in HCM City, after seven years of operation, has attracted large projects including the $1 billion one developed by Intel, and other projects by Nidec, Datalogic, Scanning and Sonion.

According to the General Statistics Office (GSO), $20.9 billion worth of FDI was registered in 2016, a decrease of 8.2 percent compared with 2015. The capital mostly flowed to processing and manufacturing industries (63.8 percent of total registered capital); retail & wholesale, car & motor repairing (7.8 percent); real estate (6.9 percent) and others (21.5 percent).

However, the disbursement rate was very high, $15.8 billion, an increase of 9 percent compared with 2015, the highest rate so far.

Infonet quoted some experts as predicting that Vietnam would face big challenges in attracting FDI in 2017 as TPP has been rejected by the Trump administration. In fact, FDI capital to Vietnam began slowing down in the second half of 2016 as investors still waited for news about TPP.

RCEP (The Regional Comprehensive Economic Partnership) has been mentioned as a potential FTA to replace TPP. It is still under negotiation and some sources predict that the negotiation may end in 2017.

BVSC predicted that FDI would slow down and disbursement may decrease slightly in 2017.

Vu Dinh Anh, a renowned economist, said that it was difficult to repeat the record of attracting $68 billion Vietnam once made in 2008. However, he stressed that the most important factor in attracting FDI is implemented capital, not registered capital.

-Compiled by VietnamCredit-

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Financial News

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