France’s investment in Vietnam has kept rising rapidly in recent years as French investors highly appreciate the investment environment in Vietnam and find Vietnam an attractive destination.
Vietnam - France cooperation ties have rapidly expanded and achieved many important results. France is one of Vietnam’s important investment partners in the European Union. According to the Foreign Investment Agency under the Ministry of Planning and Investment, as of the end of the first quarter of 2013, France ranked 16th among over 90 countries and territories investing in Vietnam with 383 projects and US$3.1 billion. Many big French corporations have invested in Vietnam. France Telecom invested US$467 million to build 540,000 telephone lines in the western part of Ho Chi Minh City. The Electricity of France led a US$400 million consortium to build Phu My Power Plant 2. Bourbon Group injected US$270 million into several sectors, with its retailing business being transferred to Casino (under the brand name of BigC in Vietnam). The European Aeronautic Defence and Space Company N.V. (EADS) is considering the construction of an aeronautic industrial complex in Danang City to assemble aeroplane components.
In the past years, Vietnam has drastically reformed investment laws, investment registration and licensing procedures to make them more simple, time-saving and efficient. Specially, Vietnam’s WTO membership is highly appreciated by French investors. With Vietnam’s stable and robust economic growth, more French companies are coming to Vietnam to do business. They are interested in information and communication technology (22 per cent of investment capital), electricity, gas and water production and distribution (17 per cent), processing industries (13 per cent), agriculture (6 per cent), hotels and restaurants (6 per cent), construction (5 per cent), and other services (19 per cent).
The French Chamber of Commerce and Industry in Vietnam (CCIFV) said Vietnam is holding plenty of competitive advantages over other countries in the region like political stability, stable economic growth, abundant human resources, low labour costs, large market, open investment environment, and strategically important geographic location. Importantly, foreign investors can expand their operations into ASEAN countries from Vietnam. Currently, France in particular and the EU in general are in crisis. Therefore, French businesses tend to shift their operations away from France and the EU and seek the promised land to expand their operations. And, Vietnam it is considered a potential market with a lot of opportunities for French businesses.
On his working days to Vietnam in late May, former French Prime Minister Dominique de Villepin said many big French companies are very interested in energy industry, and seeking and strengthening cooperation with Vietnam in this field. The presence of French businesses in Dung Quat Oil Refinery or Ninh Thuan 1 Nuclear Power Plant evidences France’s determination with this cooperation. Besides, French companies are also very interested in electricity, oil and gas, transportation infrastructure, water supply, education - training, and other fields.
He noted that although French investors think highly of the Vietnamese investment environment, Vietnam still has a lot of existing weaknesses needed to be addressed soon like high inflation, weak currency, underdeveloped infrastructure system, onerous administrative procedures, and supporting industries failing to meet domestic demand. If these backlogs and weaknesses are addressed, Vietnam will attract investors from many countries, not only France.
Mr Nguyen Hai Nam, President of the Vietnamese Entrepreneurs Association in France (ABVietFrance), said problems and failures that French businesses as well as French Vietnamese usually suffer result from the lack transparency of Vietnamese partners and the unclear legal framework which leads to legal risks. He said, to draw FDI from the world in general and from France in particular, Vietnam should open more sectors for foreign investors. For example, in its banking system restructuring programme, Vietnam should allow foreign investors to hold majority shares to take on bank governance. It also needs to enhance the transparency of investment environment in order to boost the confidence of foreign investors in general and French investors in particular.
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