VN needs to change its ways to attract FDI leaving China: experts

Vietnam has some great advantages while competing with regional countries in attracting capital flows moving out of China after the COVID-19 pandemic, experts have said.

The Saigon Hi-Tech Park in HCM City’s District 9, which has attracted a lot of foreign investment.

A report by SSI Research said foreign projects set up in industrial parks in the country were up 32 per cent year-on-year in the first four months of the year to US$9.8 billion.

The pandemic has shown that many large countries’ supply chains are heavily dependent on China, and they have taken drastic steps to cut this dependency.

Many large US, Japanese and European companies are gearing up to shift production away from China. Viet Nam is one of their destinations besides some others in the region such as Indonesia, Thailand and Malaysia.

"Compared to Indonesia, which directly competes with Viet Nam in attracting FDI, Viet Nam has the advantage of proximity to China,” the report said.

“Viet Nam also offers support to businesses, with many incentives for large FDI projects, and has a lot of free trade agreements in which Indonesia does not participate. Recently the Vietnamese dong has been very stable compared to the Indonesian rupiah."

Nguyen Van Toan, vice chairman of the Viet Nam Association of Foreign Investment Enterprises, said the opportunity to attract the FDI wave looking to relocate from China is quite clear, but not really big, and whether the opportunity can be grasped depends largely on Viet Nam.

 

"We also need to be aware that investors will not easily pull out all investment from China because that country has great advantages such as a strong work force, good use of technology and products for all market segments, not just the affordable segment."

Viet Nam would face difficulties in competing with so many rivals to attract a part of the capital flows moving out of the neighbouring country, he said.

Experts agreed that to compete in the race, the country would need to change its way of attracting FDI and quickly.

Phan Huu Thang, former director of the Foreign Investment Agency, said, “[We] will fail if we try to attract foreign investment in the traditional way.

“For example, India has immediate policies to allocate land, prepare infrastructure, identify potential investors to approach, announce tax reduction plans ... Investors are gearing up to shift their production. If we continue to act slowly, we will miss an opportunity that comes once in 100 years.”

Toan said Viet Nam needed to further improve its business and investment environment and administrative procedures.

He believes that HCM City, which leads the country in FDI attraction, has all the conditions and capacity required to make good use of this opportunity. — VNS

 
 

Other News

.
VN central bank cuts reserve interest rate to aid the economy
VN central bank cuts reserve interest rate to aid the economy
BUSINESSicon  07/08/2020 

The interest rate of compulsory reserves in the Vietnamese dong at banks will be 0.5 per cent per annum.

Record high gold prices see citizens keen to cash in
Record high gold prices see citizens keen to cash in
BUSINESSicon  07/08/2020 

Masses of people nationwide have been flocking to jewellery shops in order to sell the precious metal to cash in on the increasing trend of gold prices reaching an all-time high of VND62 million per tael.

Gold prices go up, VN central bank commits to stabilise market
Gold prices go up, VN central bank commits to stabilise market
BUSINESSicon  07/08/2020 

Prices of the yellow metal soared a new record reaching VND62million(US$2,681) per tatel or 1.2 ounce in Vietnam on Thursday after the State Bank of Viet Nam (SBV) confirmed to have solutions and sufficient resources to stabilise the market.

Ministry leaders discuss action plan to implement EVFTA
Ministry leaders discuss action plan to implement EVFTA
BUSINESSicon  07/08/2020 

Vietnamese enterprises have been urged to renovate their business strategies if they want to benefit from the EU-Viet Nam Free Trade Agreement (EVFTA), 

Top 10 most valuable brands worth US$8.1 billion
Top 10 most valuable brands worth US$8.1 billion
BUSINESSicon  07/08/2020 

The top 10 most valuable brands in Viet Nam 2020 are worth US$8.1 billion, increasing by 17 per cent from last year and accounting for 30 per cent of the list’s total value, according to Forbes Viet Nam magazine.

ASEAN’s investment contributes significantlly to Vietnam’s economic development
ASEAN’s investment contributes significantlly to Vietnam’s economic development
BUSINESSicon  07/08/2020 

Since Vietnam joined ASEAN (July 28, 1995) and committed to the implementation of the ASEAN Free Trade Agreement (AFTA) in 1996, ASEAN's direct investment has contributed significantly to Vietnam’s economic development .

Vietnam Airlines plans to sell nine planes due to financial woes
Vietnam Airlines plans to sell nine planes due to financial woes
BUSINESSicon  06/08/2020 

Vietnam Airlines is planning to sell nine A321CEO planes to optimize its fleet and improve its cash flow, as the national flag carrier’s revenue has dropped sharply due to the Covid-19 pandemic.

Vietnam – one of the best long-term growth stories in Asia
Vietnam – one of the best long-term growth stories in Asia
BUSINESSicon  07/08/2020 

Vietnam is one of the best long-term growth stories in Asia and is one of the most preferred frontier markets, according to HSBC.

Maximum $130,700 fine for listing violations: Draft decree
Maximum $130,700 fine for listing violations: Draft decree
BUSINESSicon  06/08/2020 

Public companies may receive a penalty of VND2-3 billion ($87,120-$130,700) for falsifying share listing and trading documents under a proposal from the Ministry of Finance.

Singaporean business surges ahead
Singaporean business surges ahead
BUSINESSicon  07/08/2020 

Singaporean business and investment in Vietnam has increased significantly over the decades, thus greatly contributing to strengthening economic bilateral ties.

Furthering developmental ties with dynamic Singapore
Furthering developmental ties with dynamic Singapore
BUSINESSicon  06/08/2020 

Vietnam and Singapore are witnessing their heyday in bilateral and multifaceted cooperation.

Wide impacts to be made with new law changes
Wide impacts to be made with new law changes
BUSINESSicon  06/08/2020 

Effective in 2021, the amended laws on Enterprises, Investment, and Public-Private Partnership are expected to entail breakthrough changes to Vietnam’s business and investment landscape in the coming time, 

Decisive actions to achieve goals
Decisive actions to achieve goals
BUSINESSicon  06/08/2020 

The Ministry of Planning and Investment is currently working on possible scenarios for the upcoming period amid the ongoing developments of the global health crisis.

Millenium to develop $15 billion LNG project in Khanh Hoa
Millenium to develop $15 billion LNG project in Khanh Hoa
BUSINESSicon  06/08/2020 

If the $15 billion LNG project of Millenium Group is approved, it will contribute to making the Nam Van Phong area the largest LNG centre in Southeast Asia.

Rebound likely despite bumpy roads
Rebound likely despite bumpy roads
BUSINESSicon  06/08/2020 

Despite a serious dip in local production caused by the health crisis, Vietnam is expected to be one of the fastest-growing nations worldwide this year, with the economy forecast to stay among the few nations with positive growth.

Unique advantages can pull Vietnam out of uncertainty
Unique advantages can pull Vietnam out of uncertainty
BUSINESSicon  06/08/2020 

In life, economic and health gains are not always equal. This is true for individuals and for countries. While Vietnam has managed to contain the pandemic so far, its economy has been hurt in recent months. 

Hanoi’s Old Quarter businesses bear brunt of COVID-19 impact
Hanoi’s Old Quarter businesses bear brunt of COVID-19 impact
BUSINESSicon  06/08/2020 

The second wave of the COVID-19 epidemic to hit Vietnam has continued to deal a devastating blow to small businesses, travel agencies, and tourist accommodations in the Old Quarter of Hanoi due to the suspension of operations.

Container handling charge increases proposed to attract investment in seaports
Container handling charge increases proposed to attract investment in seaports
BUSINESSicon  06/08/2020 

Container loading and unloading service charges should be increased to approach the regional level so investors would not feel hesitant when pouring money into developing seaports.

Policies encourage automakers to assemble cars in Vietnam
Policies encourage automakers to assemble cars in Vietnam
BUSINESSicon  06/08/2020 

 Several automakers are considering assembling their best-selling models in Viet Nam due to the Government’s policy of zero import tariffs on components and a 50 per cent reduction in registration fees.

Thai firms acquire wind power farm in Ninh Thuan
Thai firms acquire wind power farm in Ninh Thuan
BUSINESSicon  06/08/2020 

Thailand’s Banpu and its power business arm Banpu Power (BPP) have joined forces to acquire El Wind Mui Dinh, an onshore wind farm in the south-central province of Ninh Thuan, in a deal worth $66 million.

 
 
 
Leave your comment on an article

OR QUICK LOGIN