VietNamNet Bridge - Vietnam attracted $23 billion worth of foreign direct investment (FDI) capital in 2015. The figure is expected to be even higher in 2016 as foreign investors have been flocking to Vietnam to take full advantage of free trade agreements (FTAs).

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Economists now are concerned whether Vietnam can take full advantage of the new FDI wave to develop the economy.

South Korean investors 

According to the General Statistics Office (GSO), 2,013 FDI projects had been licensed by mid-December 2015 with total registered capital of $15.58 billion. Meanwhile, 814 projects licensed in the years before had registered additional investment capital of $7.18 billion.

In the last days of 2015, Samsung Electronics HCMC CE Complex received a license to raise its total investment capital by $600 million to $2 billion in the HCM City High-Tech Park (SHTP).

Its project in the high-tech park, once operational, would be one of Samsung’s four largest household-use electronics factories around the globe. It is expected to help boost the development of Vietnam’s skilled labor force, develop the domestic supply chain and improve Vietnam business competitiveness.

Economists now are concerned whether Vietnam can take full advantage of the new FDI wave to develop the economy.
Also in late 2015, a big company in the retail industry from South Korea – Emart – opened an Emart store in Go Vap District in HCM City. It plans to open 17 hypermarkets here.

A series of projects with huge investment capital totaling $2.67 billion has put South Korea in the first position on the list of the biggest foreign direct investors in Vietnam.

South Korean investors are compared with the ‘biggest of the bird flock’, which will lead other birds to Vietnam.

Samsung’s huge project in SHTP, for example, is hoped to help attract more South Korean and foreign enterprises which would work as satellite companies to provide components and accessories to Samsung.

What will FDI bring to Vietnam?

Experts, while believing that FDI will keep flowing to Vietnam, are encouraged by a series of FTAs that Vietnam has signed with other countries and economic blocs. 

However, they have warned that Vietnamese enterprises will face big challenges to be brought by foreign invested enterprises (FIEs).

Tran Viet Anh, deputy chair of the HCM City Rubber & Plastics Association, said that economic integration would create a big cake, but domestic small- and medium-sized enterprises would only get the crust, while the most delicious pieces would fall into the hands of FIEs.

Meanwhile, economists have repeatedly warned that FIEs enjoy too many state preferences, while Vietnamese enterprises do not receive any support from the state.


NLD