Vietnam - A Potential Market for Japan

The report by the Ministry of Planning and Investment said Japan is now the largest foreign investor in Vietnam, with 766 valid projects (as of March 2007), with combined registered capital over US$7.7 billion, including more than US$5.2 billion disbursed capital. In 2006 alone, Japanese investors pumped more than US$1 billion into 149 projects. Most Japanese-invested projects are profitably operating and are playing significant roles in modernising various Vietnamese industries.

 

This is confirmed by a survey of 1,332 Japanese companies in China, Hong Kong, India, South Korea, Taiwan and six ASEAN countries. Surveyed companies mainly operate in the fields of electrical and electronic parts, automobile and auto parts, electrical machinery and electronic devices, chemicals, and metal-ware.

 

According to Mr Kenjiro Ishiwata, chief of Japan External Trade Organization (Jettro) in Hanoi, Vietnam is one of three countries in which Japanese manufacturing companies are hopeful of higher profits in 2007 than in 2006. Especially, 66.7 per cent of interviewees believed businesses in Vietnam will have better operations thanks to increasing exports and improved productivity. The average rate in ASEAN countries is 42.9 per cent.

 

Up to 75.4 per cent of Japanese manufacturing companies in the region voted Vietnam the best production location in the next 5-10 years. This was a highest rate a single country gained in the Jetro survey. This reflects their satisfaction and expectation for improving business conditions in Vietnam.

 

At present, many large scale modern factories are being built by Japanese investors throughout Vietnam, especially in Thang Long Industrial Park (Hanoi), Nomura Industrial Zone (Haiphong), Danang Industrial Park (Danang) and Saigon Hi-tech Park (Ho Chi Minh City). Vietnam hopes Japanese investment flows will be channelled for infrastructure and hi-tech. Many Vietnamese high-ranking officials, during visits to Japan, proposed Japanese investors help build the North-south Expressway, North-south Railway and Hoa Lac Hi-tech Park. The economic relationship between the two countries has been upgraded to the strategic partner level – a level Vietnam had only shared with Russia so far.