As Western multinationals are grappling with challenges from macroeconomics and geopolitical tensions, it may be time for Vietnam to focus its efforts on luring more FDI inflows from Asia, said Joonsuk Park, head of international subsidiary banking and wholesale banking at HSBC Vietnam.

AirPods maker GoerTek from China in the northern province of Bac Ninh.

Asian investors, who have been the top injectors of money into Vietnam for many years, continue to favor the country as a destination with a high-potential future.

Singapore and Taiwan were Vietnam’s two biggest foreign investors in the first two months of 2023, with investments totaling nearly $980 million and more than $400 million respectively.

In the last five years, Vietnam’s three biggest foreign investors have come from Asia . The top investors often include Singapore, Japan and South Korea.

Recently mainland China, Hong Kong, and Taiwan have become big foreign investors in Vietnam as well.

According to the annual business survey published last month by the Japan External Trade Organization (JETRO), the percentage of Japanese firms planning to expand operations in Vietnam over the next 1-2 years is 60%, up 4.7 percentage points compared to 2021.

Matsumoto Nobuyuk, JETRO’s chief representative in Ho Chi Minh City, predicted the scale of projects in Vietnam will shrink this year, but the number of projects will continue to increase.

Park said a number of multinationals in Asia are interested in a variety of sectors in Vietnam, including retail, semiconductors, electronics and components, plastic, renewable energy, and logistics. "They’re looking to expand or make new investments here."

Thai investors also want to increase investment in Vietnamese animal feed, packaging, retail, manufacturing and chemical industries.

Last month, Thai retail giant Central Retail Corporation said it would invest 50 billion baht ($1.45 billion) in Vietnam over the next five years.

According to experts, Vietnam is attractive to investors from Asia partly because of geographical and cultural proximity.

The growing income and wealth of the middle class guarantees a promising consumer market.

However, Vietnam also faces challenges. It is not the only attractive destination for foreign firms whose strategy is to expand their production chain beyond China.

While Thailand and Indonesia are favorite destinations for the automotive supply chain, Vietnam is more likely to attract FDI in the electronics industry. But India is also luring FDI in electronics industry.

GoerTek, a Chinese maker of AirPods for Apple and PlayStations game consoles, said it is investing $280 million in the northern province of Bac Ninh to expand production outside China, but the firm is also considering pouring money into India.

Vietnam should improve infrastructure to lure Asian investors, experts said.

"The development of industrial parks in Vietnam needs to ensure the integration of sustainable factors as well as the ecosystem to improve its attractiveness and availability and lure large and long-term foreign investors," said Vu Minh Chi, an industrial services senior manager at real estate consultancy Colliers Vietnam.

According to Nobuyuk, Japanese businesses need Vietnam to improve administrative procedures, tax systems, legal systems, visa procedures, and work permits.

The country lured total foreign direct investment (FDI) of nearly US$3.1 billion in the first two months of 2023, a year-on-year decrease of 38%, according to the Ministry of Planning and Investment.

January FDI nears 1.7 billion USD

Vietnam attracted foreign direct investment (FDI) worth 1.69 billion USD as of January 20 this year, down 19.8% annually, according to the General Statistics Office (GSO).

Positive FDI attraction to Bac Giang province

(BGO) - Apart from highest ever economic growth in the history, Bac Giang was one of localities with impressive result of investment attraction in 2022. Particularly, the province secured ninth position nationwide in foreign direct investment (FDI) attraction which helped affirm Bac Giang continues to be attractive destination for investors.

FDI enterprises join hands to build great unity houses

(BGO)-  In line with developing their production and business, many enterprises especially foreign direct investment (FDI) enterprises have accompanied Bac Giang province in social welfare activities in recent years, particularly joining hands to build great unity houses for needy households.

FDI disbursement highest in past five years

Disbursement of foreign direct investment (FDI) in Vietnam in 2022 is estimated at nearly 22.4 billion USD, up 13.5% year-on-year, making it the highest amount in the past five years, the General Statistics Office (GSO) announced on December 29.

Nearly 693 million USD of registered investment added to FDI projects in Bac Giang

(BGO) – Bac Giang province approved to increase registered capital of 44 foreign direct investment (FDI) projects in 2022 to add nearly 693 million USD, representing 1.7 fold increase year on year.

Source: VnExpress