Investment

Last updated: Wednesday, May 15, 2019

 

Good Signal from FDI Inflows

Posted: Monday, March 11, 2019


As of February 20, 2019, foreign investors have poured US$8.47 billion into Vietnam, 2.5 times that of the same period in 2018, said the Foreign Investment Agency, Ministry of Planning and Investment.

Hanoi has attracted more than US$4 billion of FDI


In the first two months, Hanoi has attracted more than US$4 billion of foreign direct investment (FDI). If Hanoi maintains good growth momentum along with better policies to support business investors, in 2019, it can attract FDI up to US$5 billion, said experts. Currently, Hanoi has risen to become the leading locality in the country in attracting FDI. In particular, the city licensed 112 projects with registered investment capital of US$45.7 million; approved 31 projects increasing investment with additional capital of US$43.7 million; the value of capital contribution and share purchase of foreign investors was more than US$3.911 billion. Japan is currently the leading country in terms of investment capital in Hanoi, followed by Singapore, Hong Kong, and South Korea.

In addition, in the coming period, Hanoi will also focus on developing a number of sectors that prioritize FDI attraction in accordance with the general trend of the country, channeling FDI flows into three main areas including: Developing synchronous and modern urban technical infrastructure; applying new technology, advanced automation technology; and high value-added services.

The city leaders agreed that attracting FDI capital would require thorough implementation of solutions to reform administrative procedures. Specifically, Hanoi will maintain 100% of business registration documents online, ensuring processing time of related administrative procedures within three days; integrating four utility services to support enterprises. In addition, the city continues to review and complete the Regulation on investment management of non-budget capital investment projects in the local area, and approve the simplification plan for 61 administrative procedures in seven areas of State management; amending, supplementing, replacing many procedures.

Channeling capital into high-tech fields

Witnessing these positive movements of FDI inflows, Minister of Planning and Investment Nguyen Chi Dung said the world economy in the coming time would be more likely to slow down, and the impact of the U.S.-China trade war would partly affect Vietnam's macro economy. However, with a constantly improving business environment, high level of economic stability, attractive market development policies, Vietnam will remain a favored destination to attract a large amount of foreign investment in the near future.

FDI capital will still be an important source of capital in the total development investment capital of the whole society and an important driving force for economic growth of Vietnam in the coming time. According to the review of the Ministry of Planning and Investment, the sectors attracting large FDI include industry (69.4%) of total registered investment capital, services (29.6%) and agriculture - forestry - fishery (1%). On the other hand, FDI enterprises are playing a key role in exports, with growth and export turnover 2-3 times higher than state-owned enterprises, and currently holding up to 72% of Vietnam’s export turnover.

According to economic experts, in the recent time, foreign investment capital has been an important driving force contributing to high GDP growth and macroeconomic stability of Vietnam. This is also considered a key factor to promote restructuring, forming a number of key industries of the country's economy such as information technology, electronics and telecommunications; contribute to transforming development space, forming new urban areas, industrial parks, processing zones, and economic zones.

The scenario to attract the development of FDI inflows in the future will have to focus on key areas of development for Vietnam's economy such as high eco-friendly technology, information technology and telecommunications, electronics in the advanced level of the world, automobiles, agricultural machines, construction equipment, industrial equipment, electrical equipment, supporting industries, R&D, Internet of Things (IoT), Artificial Intelligence (AI), Social, Mobile, Analytics and Cloud (SMAC), Virtual Reality (VR), Virtual Reality Interaction (AR), cloud computing, digital economy, automation, biomedical, and new materials.

Anh Phuong








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