Oct 6, 2012

Vietnam - Vietnam has great opportunities to receive new FDI wave

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VietNamNet Bridge – The foreign direct investment (FDI) coming back to Vietnam has generate a bright part of the picture of the Vietnam’s economy. However, Vietnam would have to face challenges in calling foreign investors back.

The China – ASEAN trade fair closed in Nan Ning, China in September 2012. The presence of the leaders of the economies, the managers of big enterprises and the investors at the trade fair can show the important role of the region and signal a new foreign investment wave in the countries, including Vietnam.

Xinhua news agency has reported that China is gradually losing its advantages of the low labor force and low land price in attracting foreign investment.

The news agency, while believing that China still has other great advantages to attract capital sources for its development, has admitted that some ASEAN’s economies have kicked off the process of becoming the “world’s production bases.” At present, the phrase is still used to say about China.

Citing Vietnam as a typical example, the news agency has reported that Vietnam has surpassed China in fulfilling the outsourcing orders placed by the world’s sportswear manufacturer Nike over the last two years.

Analysts have commented that Vietnam has been benefiting from the process of disposing the industrial production. Nike has placed more orders to Vietnam, which not only can bring immediate profits, but also can also bring the opportunities for Vietnam to make higher grade products.

Just some months ago, the panorama of FDI in Vietnam was described as “gloomy” when an UNCTAD’s report showed that Vietnam was one of the few countries in South East Asia that witnessed the FDI in decline.

However, the continual working visits to Vietnam paid by foreign groups of businessmen and delegations of officials have sent a message that the FDI is returning.

In early September 2012, the US Trade Representative Ron Kirk, escorted by some US businesses paid a visit to Vietnam, bringing the message that the US wants a bigger role in the Vietnam’s economy.

At the same time, a survey by the US Chamber of Commerce and Industry in Singapore showed that 57 percent of polled businesses said they planned to expand business to Vietnam, higher than the percentages for Thailand or Indonesia.

In mid-September, the working visit by the German Economics and Technology Minister Philipp Roesler escorted by 230 businesses continued warming up the investment atmosphere in Vietnam.

Later on the last days of the month, more and more businesses from the UK, France and Japan arrived in Vietnam, showing their special interests in the fields of finance investment, seaport, energy and infrastructure development.

According to Chair of the Japan Chamber of Commerce and Industry Tadashi Okamura, pushing up the Japanese investment in Vietnam has become a goal pursued by the government.

VnExpress has quoted Alan Pham, Vinacapital’s Chief Economist, and Bui Kien Thanh, a Vietnamese economist as saying that there has been an increasing interest of foreign investors in Vietnam. Having the closed relations with foreign investors, the two said that Vietnam is an attractive market with 90 million consumers and cheap labor force.

They both also said that foreign investors now eye Vietnam also because of their policy on shifting out of China.

The comments by the economists can be partially reflected in the figures about the FDI projects registered in the last nine months. According to the Ministry of Planning and Investment, 8.1 billion dollars worth of FDI has been registered, equal to that of the same period of the last year, though Vietnam and the world are now in bigger difficulties.


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