German Investment Attracted

Vietnam attracts German investments in not only capital and high technology but also management experience.

 

As of November 20. 2006, Germany has 77 investment projects with an investment capital of US$367.3 million, ranking 20^th among 76 countries and territories investing in Vietnam, and 5^th among 25 EU members. The average investment is US$4.8 billion per project (US$18.2 million by Singapore, US$12.6 million by France, US$11.6 million by Hong Kong), German projects are wholly foreign owned or joint ventures.

 

According to the Ministry of Planning and Investment, German projects have created over 4,000 direct jobs and thousands more indirect jobs. In 2000-2002, the turnover of German projects increased by over 10 times (from US$5.6 million to US$57.8 million) and reached US$82.7 million in 2005.

 

Like most foreign investors in Vietnam, German investors have little interest in agriculture, forestry and fisheries with only three projects worth US$17.8 million, or less than 5 per cent of the total investment capital. Meanwhile, 44 projects are in industry-construction capitalized at US$286 million and 29 projects in service worth US$63.4 million. Obviously, German investments are based on its comparative edge as an industrialized country.

 

According to the Foreign Investment Department and Ministry of Planning and Investment, German investments and those of other EU members in Vietnam are still low compared to their potential. They must be increased to accelerate the industrialization of Vietnam.

 

However, to obtain modern and high quality projects with low cost, Vietnam should encourage investors with preferential treatment and expand new forms of investments while developing securities and technology markets. In addition, Vietnam should also prepare a list of investment projects suitable to investors in the trade and tourism sectors.

 

It is reported that the Ministry of Planning and Investment is recommending that the government establish a trade promotion representative office in the EU to attract more investments from the EU, including Germany.