Vietnam Draws More FDI Capital

Among new projects, three alone had US$6.6 billion of investment capital, including US$3 billion Samsung Display project, US$2.4 billion Duyen Hai Thermal Power Project II, and US$1.2 billion Empire City. The disbursement of foreign direct investment (FDI) also set a record although global foreign investment flows have not revitalised. This shows the confidence of foreign investors in Vietnam market is being consolidated and strengthened. This will be a chance for Vietnam's economy to approach big well-reputed corporations in the world. New projects will generate jobs, social benefits and money for the State Budget.

 

With the presence of world-leading corporations, Vietnam has the opportunity to approach projects with modern technologies from South Korean and Japanese conglomerates. This will help restructure the economy and positively impact some industrial production sectors, especially computer and parts production, optical device manufacturing, smartphone and parts manufacturing.

 

The performance of foreign-invested enterprises is clearly expressed by data released by the General Department of Vietnam Customs. Foreign companies continued to outperform exports and accounted for 70 percent of Vietnam's export turnover, thus playing a leading role in the country’s exportation. Specifically, they fetched more than US$95 billion from exports, up almost 16 percent from the same period of 2014, and took a trade surplus of US$12 billion. This important result has helped ease trade deficit of Vietnam, caused by domestic firms.

 

Electronics, computers and parts were the biggest forex earners. Samsung continued to be the biggest exporter with US$27 billion in the year to date, expected to end the year with US$30 billion, followed by garment - textile and leather - footwear industries with respective year-on-year growth of 10.3 percent and 18.3 percent.

 

Besides, foreign investors are seeking local suppliers to replace imports from third countries to reduce costs. This is an opportunity for local businesses to become suppliers for foreign firms in the long term and acquire new know-how.

 

According to the Ministry of Planning and Investment, FDI flows into Vietnam continue to improve. Thus, Vietnam is still an attractive destination for international investors. According to experts, to accelerate international integration as required, the Government and relevant authorities must step up institutional reform and gradually apply full market economy conditions to attract foreign capital flows.

 

Especially when Vietnam joins the Trans-Pacific Partnership (TPP) Agreement, the reform of economic institutions and realisation of integration commitments amidst stepping up SOE equitisation must be quickened. This is seen as an opportunity for domestic and foreign businesses to strengthen cooperation, hold stakes of each other, and kindle a boom in mergers and acquisitions in Vietnam. According to economists, TPP will be a good opportunity for Vietnamese companies to expand export advantages and build up relations with foreign-invested companies. This is expected to create a new wave of foreign investment and the US is expected to step up to become a top foreign investor in Vietnam soon.

 

As peers in the US, corporations from developed countries like Japan and South Korea will also accelerate their investment in Vietnam, focusing on manufacturing industry to expand their production chains in the country. Advantageously ccompetitive sectors of Vietnam like garment - textile, leather - footwear, furniture, rice, coffee, aquaculture, pharmaceutical, tourism and recreation, infrastructure and logistics will the targets of foreign firms in the future.