Foreign investors are speeding up the restructuring and reallocation of their production networks globally, with Vietnam considered a bright candidate for investment given its location within the world’s most dynamically-developing region.
The country’s prestige and position have improved in recent times thanks to its achievements in fighting the COVID-19 pandemic.
“This is a chance for the world to know about Vietnam as a safe investment destination that is keen to receive new investment flows,” said Minister of Planning and Investment Nguyen Chi Dung.
According to the ministry’s Foreign Investment Agency (FIA), FDI in the first four months of 2020 to Vietnam stood at 12.33 billion USD, equal to 84.5 percent of the figure in the same period last year.
Though newly-registered capital and additional capital to existing projects increased, capital contributions and shares purchased by foreign investors fell remarkably, resulting in a decline in total capital.
FIA Director Do Nhat Hoang said the result is acceptable given the significant falls in investment activity seen around the world.
Minister Dung stressed that foreign investment is the main factor behind Vietnam being listed among the world’s 30 leading exporters.
During January-April, the foreign-invested sector’s export turnover reached 56.49 billion USD, up 1.5 percent against the same period last year and accounting for 70.2 percent of the total. Its import value hit 46.32 billion USD, up 2.9 percent year-on-year and making up 57.6 percent of the total.
Hoang said Vietnam possesses huge potential in foreign investment attraction as investment safety will be a top priority of investors for the foreseeable future.
Vice President of the Korean Business Association in Vietnam Hong Sun said that success in fighting COVID-19 and stability in its business and investment environments have positioned Vietnam as a safe destination for investment projects.
The country’s potential has yet to be tapped fully, offering many cooperation opportunities for foreign businesses, he added.
Minister Dung affirmed that the COVID-19 pandemic has created new perceptions, new consumer trends, new business models, and new value chains.
This really is an opportunity, he went on, for businesses to look back on their capacity, resistance, and adaptation in regard to market changes and restructure production and change strategies accordingly.
New free trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA) taking effect will also help Vietnamese enterprises participate in global value chains and increase their capacity and competitiveness, he added.
Economists, meanwhile, have advised Vietnam continue improving its business and investment environment, creating the conditions necessary for enterprises to overcome the difficulties caused by COVID-19 and intensifying investment promotion through overseas diplomatic offices./.VNA
Foreign investors are considering relocating their production bases out of China, and many of them are heading for Vietnam.
Since national reunification in 1975, Vietnam’s economy has grown from strength to strength. Senior economist Nguyen Mai writes about how the economy has developed in that time, with foreign direct investment serving as one of the key driving forces.