VietNamNet Bridge - Foreign investors have been flocking to Vietnam as they can see great opportunities here. Vietnam needs to use the right to choose investors in the best way so as to fully exploit foreign direct investment (FDI), experts say.

 

Japanese FDI in Vietnam

At least 63.9 percent of Japanese businesses said they want to enlarge business in Vietnam, the highest figure among 19 countries and territories where Japanese have invested.  

Meanwhile, only 38.1 percent of Japanese investors said they want to expand their operation in China.

The figures were released by Yasuzumi Hirotaka, head of the Japan External Trade Organization (Jetro), at an event on January 23.

Though the number of Japanese businesses that made profits in 2015 decreased by 3.5 percent and the number of businesses that took loss rose by 1.3 percent, Japanese still consider Vietnam as an important investment destination. 

This is because 85 percent of Japanese businesses still saw revenue increasing. And more importantly, they still can see opportunities for high growth rates when investing in Vietnam.

Jetro’s chief noted Vietnam has strong advantages to attract FDI, especially a cheap labor force. The production cost in the manufacturing sector is just equal to less than half of that in China, Thailand and Malaysia.

Meanwhile, 70 percent of Japanese businesses put high expectations on the tariff mechanism to take effect with the Trans Pacific Partnership Agreement (TPP).

Japan is now the third largest foreign direct investor in Vietnam with $1.842 billion worth of FDI projects registered in 2015.

Vietnam’s right to choose investors

An analyst said that not only Japanese but American and other investors also say they want to invest in Vietnam. 

At least 63.9 percent of Japanese businesses said they want to enlarge business in Vietnam, the highest figure among 19 countries and territories where Japanese have invested.

However, Vietnam cannot fully exploit the opportunities brought by the foreign investors.

“Vietnam opens the doors widely to welcome guests, but it has not prepared itself well to receive guests,” he said.

“If Vietnam does not change, foreign investors, no matter whether they are from Japan, the US or any other country, will come to Vietnam just to sell products and to hire labor and use or buy natural resources. If so, Vietnam will not earn money,” warned Bui Ngoc Son, a renowned economist.

Agreeing with Son, Nguyen Thanh Thu from the HCM City Economics University, said the choice of Vietnam will decide if it can get benefits from FDI.

“We must say ‘no’ to projects which cannot meet the standards on technology and environment,” Thu said.

Nguyen Tri Hieu, also a renowned economist, said that opportunities come and leave regularly, so Vietnam needs to be wise enough in choosing suitable partners. 

He went on to say that it is necessary to expand cooperation with countries so as to ease the reliance on certain economies.