Workers at a foreign-invested firm in Binh Duong Province. — VNA/VNS Photo Chi Tuong

Foreign investment inflows into Viet Nam will likely reach US$36-38 billion in 2023, according to the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment.

Disbursement of foreign investment this year is expected to hit $22-23 billion, Deputy Director of the FIA Do Van Su told baodautu.

The opening of China's economy might affect Viet Nam's foreign investment attraction, Su said, adding that China remained the leading investment destination in the region, so when they opened up, capital would flow into this market while that to Viet Nam and other economies in the region would be limited.

On the contrary, the investment capital movement of South Korea, Japan, and Taiwan from mainland China would be accelerated. This shift would be accelerated until 2025, and Viet Nam would be a preferred investment destination for investors, Su told the online newspaper.

Currently, South Korea, Japan and Taiwan (China) are Viet Nam's major sources of foreign investment and they have constantly increased their investments in Southeast Asian countries.

According to the FIA, essential factors for FDI to continue to prosper in 2023 included economic growth results in 2022, endless efforts of authorities in improving the business investment environment, creating trust with investors and effectively exploiting the advantages of free trade agreements.

Nguoi lao dong (Labourer) newspaper cited Minister of Planning and Investment Nguyen Chi Dung as saying that Viet Nam had adopted a selective approach to attracting foreign investment inflows which would contribute to the country's implementation of the sustainable development strategy.

Priority would be given to projects using new and green technologies, with high added value, modern corporate governance, high spillover effects, ensuring technology transfer and being integrated with global supply and production chains, Dung said.

To lure more foreign investment, Dung emphasised the importance of developing innovation and financial centres at the regional and international levels, creating a driving force for socio-economic development in the coming period.

He added that stabilising the macro-economy, improving infrastructure and the quality of human resources would be also needed.

Economic expert Le Dang Doanh told the Labourer that Viet Nam needed to have a comprehensive assessment of the trend of shifting foreign investment inflows soon so that the country could have more appropriate and effective policies to attract this capital flow.

Accelerating administrative reforms, improving the investment environment, and ensuring policy stability would make foreign investors feel secure when they pour capital into Viet Nam.

Good news

Since the beginning of this year, Viet Nam saw good news in foreign investment attraction as nearly $900 million in foreign direct investment (FDI) has been registered in the northern province of Bac Giang.

On January 7, China’s Yadea Group said it would invest $100 million in a factory to manufacture and assemble electric motorcycles with an expected capacity of about two million vehicles per year in the province's Tan Hung Industrial Park.

Covering an area of 23.2ha, the project will be implemented in the second quarter of 2023.

Earlier on January 2, Bac Giang Province granted an investment certificate to Singapore’s Ingrasys Pte Ltd, the Fulian precision technology factory project investor signed an MoU with Chinese investor Hainan Longi Green Energy Technology Co Ltd on a project to produce solar panels.

Both projects will be conducted from the first quarter of 2023, with combined registered capital of about $761 million.

A bright spot in 2022

Last year, foreign investment in Viet Nam remained a bright spot on Viet Nam's economic picture, despite experiencing a year-on-year decrease in value, thanks to its disbursement reaching a five-year high.

Data from the Ministry of Planning and Investment showed as of December 20, there were 2,036 newly-registered foreign direct investment (FDI) projects worth $12.45 billion, up 17.1 per cent year-on-year in the number of projects, but down 18.4 per cent in value.

In addition, 1,107 projects had their capital adjusted, with a total amount of $10.12 billion, up 12.4 per cent and 12.2 per cent year-on-year, respectively.

Capital contributions and share purchases (foreign indirect investment or FII) were worth $5.15 billion, down 25.2 per cent. This figure made total foreign investment in the country in 2022 top $27.7 billion.

Meanwhile, FDI disbursement in 2022 hit nearly $22.4 billion, up 13.5 per cent year-on-year, making it the highest amount in the past five years, the General Statistics Office (GSO) reported.

Accumulated to December 20, 2022, the whole country was home to 36,278 valid projects with a total registered capital of approximately $438.7 billion. The accumulated realised capital of foreign investment projects topped $274 billion, equalling 62.5 per cent of the total valid registered investment capital.

Foreign investors poured funds into 19 out of 21 sectors in the national economic classification system, of which the processing and manufacturing industry maintained its lead in terms of attracting FDI with a total investment of over $16.8 billion, accounting for 60.6 per cent of the country’s total capital.

Among 108 nations and territories pouring capital into Viet Nam this year, Singapore ranked first with $6.46 billion. It was followed by South Korea ($4.88 billion), and Japan ($4.78 billion).

The foreign investors invested in 54 provinces and cities nationwide in 2022. HCM City came first with more than $3.94 billion, Binh Duong ranked second with a total investment capital of over $3.14 billion. Quang Ninh ranked third with a total registered investment capital of $2.37 billion. — VNS