Mar 17, 2013

Vietnam - Which countries Vietnam most expects FDI from?

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VietNamNet Bridge – The plan on the investment tendencies of strategic partners being compiled by the Ministry of Planning and Investment (MPI) would give the answer to the question which countries Vietnam should attract foreign direct investment (FDI) from.

A common answer one would hear from the leaders of local authorities when asking whom they would target to when promoting FDI - Japan and South Korea. The information has been provided by Pham Thuyen, Head of the Hai Phong City’s Management Board of Industrial Zone.

“The investors from the US are also the ones we target to,” said Nguyen Van Doc, Chair of Quang Ninh province.

It’s understandable why local authorities most expect investments from Japan, South Korea and the US.

Japan and South Korea have been listed as the “prestigious” investors in Vietnam, not only because they have registered big projects, but also because they have been implementing their registered projects rapidly and effectively. Itochu, Honda, Toyota, Mitsubishi, Samsung, LG, Kumho Asiana are the best known names.

A report by MPI showed that Japan now is the biggest foreign investor in Vietnam, while South Korea ranks the third in the list of 98 foreign investors in Vietnam. The investors have registered 1,859 projects capitalized at $29 billion, and 3,206 projects capitalized at $24.86 billion, respectively.

Meanwhile, the US also deserves to be included in FDI. If Vietnam can attract more investments from the biggest economy in the world, it would be able to have capital, technologies, management skills and large markets.

The US investments in Vietnam so far, due to many reasons, remain far below the expectations. By February 20, 2013, the US had had 642 valid projects in Vietnam with the total investment capital of $10.5 billion. The US, which now ranks the 7th among the foreign direct investors in Vietnam, has always been the leading partner in the eyes of Vietnam.

Nguyen Mai, Chair of the foreign invested enterprises’ association, a well-known economist, said that besides the three important partners, Vietnam should also target the investors from Taiwan, Singapore in Asia, the UK, Germany and France in Europe.

Mai said he thinks four strategic partners in Asia would be enough for Vietnam, though some economists believe that India should also be listed as a strategic partner. Meanwhile, France, in the eyes of many Vietnamese businesses, is not an important market. However, Mai believes that France is an important part of Europe.

The Taiwanese investment in Vietnam has decreased over the last few years due to its economic difficulties. However, according to Bui Trong Dinh, Investment Counselor to Taiwan, Vietnam still has big opportunities to attract FDI from the partner.

Taiwanese investors have expressed their wishes to extend the Vietnam-Taiwan agreement on investment promotion which would be 20 years old by May 2013. Therefore, Dinh has urged to reconsider the agreement and add some new provisions.

According to MPI’s Foreign Investment Agency, despite its great potentials, India’s investments in Vietnam remain modest with $250 million worth of registered capital, ranking the 30th among the foreign investors in Vietnam.

However, India recently has been mentioned repeatedly on local newspapers as the developer of many big scaled projects, such as Tata, Relience, Essar, ONGC, Infosys, NIIT, Wipro in the fields of steel manufacturing, oil and gas exploitation, petrochemistry, information technology and communication.

Of the projects, the best-known is the steel complex project by Tata, which plans to develop it with the investment capital of five billion dollars.

TBKTVN


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