Last updated: Wednesday, May 15, 2019


Catching New Waves of Investment from Japan

Posted: Tuesday, March 05, 2019

Japan is the largest ODA donor, the second largest FDI investor and the fourth largest trading partner of Vietnam, with a two-way trade value of nearly US$40 billion in 2018. Besides, the Vietnamese SME community is the second biggest recipient of Japanese investment, only after China.

At the recent “Vietnam - Japan Economic Dialogue” Workshop co-organized by the Vietnam Chamber of Commerce and Industry (VCCI) and the Japanese Chamber of Commerce and Industry (JCCI) in Hanoi, VCCI President Vu Tien Loc said that the bilateral economic, social, cultural and diplomatic relations have made great progress to date. Japan has always been a leading economic, trade and investment partner of Vietnam.
In 2018 alone, Vietnam’s merchandise export value to Japan increased sharply. The country shipped apparels, seafood and wooden furniture to Japan. In the opposite direction, Vietnam continued to import billion-dollar commodities from Japan such as machinery, equipment, computers, electronic products and steel.

According to Dr. Loc, with open-door policies on foreign investment, Vietnam is emerging in the region and the world as an ideal destination for foreign investors. Japan always helps Vietnam to develop and improve its supporting industries. This is also one of focused cooperation contents agreed on by the two governments. The two sides regularly organize exhibitions and seminars on Vietnamese - Japanese supporting industry development.

But, for him, Vietnamese supporting industry enterprises are weak and insufficient and they have not engaged deeply in global value chains or provided products and services wanted by foreign investors. Therefore, in the coming time, Vietnam hopes the Government of Japan will have more support policies for better and stronger development of supporting industries.

Mr. Kobayashi Yoichi, Chairman of the Japan - Mekong Business Cooperation Committee under JCCI, said, the presence of Japanese companies in Vietnam has increased rapidly, already exceeding 1,900. The Japanese capital value in Vietnam reached US$8.6 billion and ranked first among foreign investors in the country for two consecutive years. However, this figure is still fewer than 3,300 Japanese enterprises investing in China.

Referring to a new global investment trend, he noted that investors, not only from Japan but also from many other countries, will redirect their investment from China to Vietnam, adding that technology transfer is being started, especially in the context of the escalating U.S. - China trade war. The production shift from China to Vietnam will make technology transfer more powerful.

Another strength in Vietnam - Japan investment cooperation also mentioned by Mr. Kobayashi Yoichi is Vietnam's attractive consumer market to Japanese businesses. New trends show that many Japanese small and medium-sized service businesses active in China are also particularly interested in the restaurant sector in Vietnam, a country with a population of nearly 100 million people.

Another focus of cooperation in the trade and investment relations in the coming time is agriculture. The two countries can fully launch a clean and safe agricultural production belt and export products to third countries because they can develop well this field. This has been fully demonstrated by Vietnam’s million-dollar shipments to Japan like mango, dragon fruit, longan and litchi, which are very popular in Japan. This cooperation strength is necessarily boosted to increase bilateral trade value.

Anh Phuong

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