Foreign direct investment (FDI) from the US into Vietnam is likely to increase sharply after the country gains a ticket to the World Trade Organization (WTO) and the two countries complete opening of their services sector under the Vietnam-US Bilateral Trade Agreement (BTA), said Phan Huu Thang, Head of the Foreign Investment Department under the Ministry of Planning and Investment (MPI).
“The US’s firms extremely think highly of tariff priorities and especially the improved investment climate in the developing country,” Thang said, adding that this is one of key reasons to explain why more and more investors from the powerful economy have been pouring money into Vietnam for the past few years.
With huge potentials in capital and technology, businesses from the country topping in FDI in the world will be certainly confident to enter Vietnam in all economic sectors, he noted.
Meanwhile, to prepare for deeper integration into the global economy, Vietnam has made great effort to make the Investment Law and Cooperate Law more appropriate, which focus on creating more favorable conditions for overseas investors via removing unnecessary regulations on export ratio, localization rate and technology transfer.
Besides, the Southeast-Asian country has been trying its best to improve infrastructure network, and human resource quality in a bid to lure more international partners in general and US businesses in particular. Vietnam’s political stability is seen a key factor to attract a new FDI wave in the coming time, the official emphasized.
“The US companies are not likely to ignore such advantages of the fast-growing economy of Vietnam, which promise them bright business chances,” Tuan stressed.
He said the Intel Group’s investment of $605 million into southern Vietnam is regarded as a breakthrough in FDI attraction of Vietnam in 2006.
The first visit by Microsoft President Bill Gates to the country very recently is also expected create driving forces for economic ties between the two sides, Tuan said, adding that these signals showed that the US enterprises have started keeping eyes on the Southeast-Asian market.
However, Tuan said, despite the BTA playing an important role in promoting trade relations between the two countries, US investment in Vietnam has not matched potential as it accounts for less than 5 per cent of the total FDI projects and FDI capital Vietnam while Asian investors present over 70 per cent.
Currently, US companies have 289 valid FDI projects in Vietnam with combined registered capital of over $2 billion. With realized capital reaching around $777 million, the US ranks 9th among 74 countries and territories with FDI in Vietnam.
In the first 8 months of this year, 25 US projects worth $444.2 million were licensed and in this period, the US ranked 3rd among 33 countries and territories investing in Vietnam.
So far, Vietnamese companies have had 16 projects worth a total of $7.4 million in the US, a modest number, the head revealed. However, he added this proves new developments in economic relations between the two countries, which have turned from one-side tie into two-side one.
The Vietnamese Government is now encouraging local businesses to invest abroad with special incentives, which is expected to increase the country’s investment to the US in the time to come. The preferred fields are those requiring much labor exports, promoting traditional products of Vietnam; expanding markets in invested countries; and boosting exports.
Vneconomy
Vietnamese
