Taiwan Increases Investment into Vietnam

Investors worldwide are constantly increasing their investment capital and business in Vietnam. An official report released by the Ministry of Planning and Investment (MPI) ranked South Korea first on the list of foreign investors in Vietnam, but Taiwanese investors do not think so.

 

According to MPI’s report, released in the 14^th Annual Vietnam - Taiwan Business Conference in early July 2007 in Ho Chi Minh City, as of mid-June this year Vietnam attracted 7,490 foreign direct investment (FDI) projects with total registered capital of over US$67 billion since the Law on Foreign Investment took effect in 1987. Taiwan accounted for 1,614 operating projects with total registered capital of approximately US$8.5 billion, ranking third among 78 countries and territories investing in Vietnam. However, if investment projects of Taiwan’s enterprises are counted in total FDI projects in Vietnam via the third country (Thailand, Hong Kong), then total investment capital from Taiwanese firms in Vietnam surpasses US$10 billion, topping the foreign investment list.

 

Mr Nguyen Xuan Trung, Vice Director of Foreign Investment Department under the MPI affirmed that Taiwan’s investors were among the first foreign investors arriving in Vietnam after Vietnam implemented reforms and opened the economy. Especially, after Vietnam became the 150^th member of the World Trade Organisation, investment from Taiwan enterprises is focusing on hi-technology, mechanics, iron and steel, and health care with larger scale and higher quality. Direct investments from Taiwan promote economic development, production and business in Vietnam.

 

Mr Nan-Huei Huang, chief representative of Taipei Cultural and Economic Office in Hanoi said Taiwan’s investment projects are located in many cities and provinces in Vietnam and investors tend to move projects from the south to the north of the country. Besides Taiwan’s renowned trademarks such as Chinfon, Phu My Hung, Vedan and Tainan, with many medium and small-sized enterprises from Taiwan are reinvesting, expanding and diversifying business. For example, C.Q.S Group is now running five plants in Ho Nai Industrial Park in Dong Nai province, specializing in producing automobile and motorbike spare parts, and mechanical equipment, with initial capital of US$4 million in 2001, now up to US$15 million. The group plans to design and produce vending machines, with capital in Hung Nghiep Formosa up to US$66.4 million, VMEP to US$93.6 million, and Ritek by US$30.5 million.

 

However, Taiwan’s enterprises are facing a new challenge, labour. Businesses that need more labour will no longer have a competitive advantage. In an interview, a senior C.Q.S group official said his company is encountering difficulty in seeking and keeping employees. They tend to return home to work in new industrial parks, or seek better paid jobs. Thus, the number of loyal workers at the company for five years or more is very small.

 

Vietnam’s WTO accession in early 2007 brought more and more foreign investors to the country, but Taiwan’s enterprises still believe in their success here. Huang Shi-Hui, President of Vietnam Commission (CIECA), President of Chinfon Group affirmed that Vietnam is still the top investment destination of Chinfon Group, and Taiwan’s enterprises in general. He quoted that besides the three main investment sectors in Vietnam of banking, cement and motorbike manufacture, the group is also carrying out automobile assembling and manufacturing.