With Vietnam accession to WTO and US Congress approval of Permanent Normal Trade Relations (PNTR) with Vietnam, Vietnamese market has become most attractive to American investors. Experts believe that big American investments will be made in 2007. However, it remains to be seen in the last three months of the year as no remarkable change happened in the first nine months.
Carefulness
Conditions for American investments in Vietnam are varied. They are modern infrastructure, implementation of WTO commitments, good management, corruption supervision and healthy business activities. American investors are also concerned about the slow process of formalities. Those issues have been raised for many years.
In fact, American businesses have recognized the fast growth of Vietnamese economy and wish to play a role in such development. Vietnam is obviously a good opportunity in South East Asia. However, American investors wish to make careful steps. The big groups require strong foundation and favourable conditions for their investments. Evidently, it is the carefulness before making important decision in Vietnam. When bilateral relations reach new high, they are eager to learn about Vietnamese market. President Nguyen Minh Triet’s visit to the US last June is such an opportunity.
Currently, many important American projects are under preparation. Many American investors consider Vietnam as potential market. The advantages of American investors are finance and high technology. They are also priorities of Vietnam in attracting investments. According to the statistics of Foreign Investment Department, there are 325 American investment projects with registered capital of US$2.3 billion, ranking 8th among 77 countries and territories investing in Vietnam. If investments through third countries are included, the investment projects are 396, registered capital is over US$4.7 billion and ranking 6th among 77 countries. American businesses are also interested in indirect investments through investment funds and securities market. Some of them are already successful in this area.
Investment areas
Nowadays, infrastructure projects are attracting American investors as Vietnamese government encourages investments of private sector in the development of infrastructure. Some projects under negotiation are Mong Duong Thermal Power Plant 2 (Quang Ninh) with capacity of 1,200MW by joint venture between AES (US) and Vietnam Coal and Minerals Group and in the form of BOT with investment capital of US$1.46 billion; Nhon Trach Thermal Power Plant 2 of Gannon group; bauxite mining project in Dak Nong with investment capital of US$1.5 billion.
American investors are always careful in taking decision, once they decide to invest, with their strength in finance and technology they develop it very fast. American businesses are seeking investment opportunities in Vietnam and they will loom large in the near future. With Trans-national Corporations strong in finance and technology, especially hi-technology and source technology, American businesses are among main targets of Vietnamese investment strategy.
As American projects are big, they usually take more time, one to two years for preparation, getting information and negotiating with Vietnamese ministries and partners. But when they start the implementation, they make it fast. Many American projects are export-oriented, developing research centres, technology incubators, information networks for training projects most essential for Vietnam such as 3G capacity building by Unisys group or infrastructure projects on electricity and mining by Alcoa. Those projects have also improved conditions in poor areas and boosted socio-economic development in the Central Highlands.
Positive forecast
Experts predict that total American investment will hit US$8 billion in 2007, US$4 billion more than 2006. Sign of the new investment flow has been confirmed by MPI officials after series of American business activities in Vietnam. Unlike careful steps made in the initial stage of bilateral trade agreement, with Vietnam WTO membership, American businesses now do not miss investment opportunities in Vietnam. Many of them start getting profit.
The turnover of Dichkerson Knight Group has increased 50 per cent in 2006. Leon D. Dematteis Construction Corp supervising 26 construction projects in Vietnam has recruited more staff for business expansion. Starwood group plans to build another hotel in Hanoi. In the mean time, Intel chip factory worth US$1 billion is under construction in Ho Chi Minh City. Experts also believe that current American investment is only the first step. In May 2007, Jabil Vietnam (US) has been granted license for investment in micro-electronics, IT and telecom in HCMC hi-park with investment capital of US$100 million. For its part, IBM has decided to build a global service centre in HCMC University.
Hong Le
Vietnamese
