Japan, Vietnam Trying to Upgrade Strategic Partnership to Higher Level

 

In the official visit to Vietnam in January, Japan’s Prime Minister Shinzo Abe and his Vietnamese counterpart Nguyen Tan Dung declared the opening of the Vietnam-Japan Friendship Year 2013 with series of political, economic and cultural activities to be organized to develop the two countries’ strategic partnership for peace and prosperity in general.

 

On this occasion, Vietnam Business Forum had an interview with the Japanese Ambassador to Vietnam, Mr Yasuaki Tanizaki. Nam Pham reports.

 

We are very happy to see the strong development of the bilateral relations between Japan and Vietnam in recent years, particularly the rapid growth of Vietnam’s economy. Over the last two decades, Vietnam has changed quickly to open up the economy, and Japan decided to resume ODA for Vietnam, making the cooperation more fruitful than before. Six years ago, in 2006, Vietnam Prime Minister Nguyen Tan Dung, in his official visit to Japan, had a frank discussion with Japan’s Prime Minister Shinzo Abe, and at that time the two countries’ leaders signed a very important agreement, the Japan – Vietnam Strategic Partnership, which provided a framework for both the governments and businesses of Japan and Vietnam to strengthen cooperation in many areas. Over the last six years, we have seen comprehensive cooperation between the two countries, especially, Japan’s ODA for Vietnam saw an increase of almost three times, and foreign direct investment (FDI) from Japan to Vietnam increased rapidly.

 

As I mentioned above, we saw a huge amount of Japan’s FDI poured into the Vietnamese market in recent years. In 2012, Japan was the biggest investor to Vietnam with all the newly-registered and expanded projects worth around US$5 billion, accounting for nearly 40 percent of the total FDI to Vietnam. The percentage is remarkable and considered clear evidence for the successful economic cooperation between Japan and Vietnam.

 

For each FDI project of Japan to Vietnam, you can see useful, positive changes of contents of FDI projects here. There are huge amount of Japan’s FDI coming in Vietnam’s real estate market, especially eco-biological urban areas, and infrastructure development. Tokyu Binh Duong Garden City, an urban development project of the US$1.2 billion joint venture between Becamex Group and Japan’s Tokyu Group, is one typical example for the new wave of investment from Japan to Vietnam. More small and medium-sized companies from Japan, especially in the fields of supporting industries, are now looking forward to the Vietnamese market. This is the change in structure of Japan’s FDI projects to Vietnam.

 

We hope that the trend will continue and more Japanese investment will come to Vietnam this year, and the governments of the two countries are trying to facilitate their businesses by regularly organizing business forums and dialogues to solve difficulties which hinder the performance of businesses.  

 

There are both positive and negative changes in the business environment in Vietnam recently, but negative changes are just short-term issues. When I talked with leaders of Japanese companies in Vietnam, almost all of them said there were few problems here when they made financial decisions to invest. In the short run, the Vietnamese economy is facing negative impacts such as slow progress of administrative procedures and decision making, slow economic restructuring, and imbalance between demand and supply of products and services in some key economic sectors, especially in the real estate market.

 

There are fundamental, crucial problems in the banking system which may affect the economy in the long run. And the Japanese investors are very interested in solutions; how the government will solve the problems. If these problems are not solved in the long run, it may badly impact Japanese investment flow in Vietnam because Japanese investors, when selecting investment destinations, always consider what the favourable conditions for them are first. We have seen remarkable increase in Japan’s FDI to Vietnam in recent years, so we can hope that more FDI from Japan will come to Vietnam in the coming years if these negative issues can be solved.

 

Vietnam has many advantages in attracting foreign investment in terms of a young and large population, skilled labour force, qualified engineers, and also security and safety issues. I think Vietnam is one of the safest countries for investors, which is a very important condition of the business environment.

 

Over the last six years since the strategic partnership was signed, we have witnessed brilliant cooperation achievements in the fields of FDI and ODA. Therefore, it is high time for the two countries to cooperate more and more intensively in many other areas, especially the security aspect. Recently, leaders of Japan and Vietnam have been ready to upgrade the existing strategic partnership to a higher level, resulting in more comprehensive cooperation. It means we will pay more attention to promoting cooperation in other fields such as culture, tourism, education, and others which are very important for bilateral cooperation in the long run.

 

To promote the multifaceted and friendship cooperation between Japan and Vietnam, there will be many political, economic, and cultural activities organized in both Vietnam and Japan to help the two nations’ people better understand each other.

 

We are cooperating with many organizations and agencies of both Japan and Vietnam to plan a series of activities throughout the whole year, and some of these remarkable events in Vietnam are as follows: