VietNamNet Bridge – Japanese investors have poured more money into the service, retail finance and banking sectors, but they will continue focusing on industrial projects in Vietnam, experts say.

Local newspapers have recently quoted Vietnamese economists as saying that Japan has been taking slower steps towards Vietnam and that Japanese tend to pour capital into the service sector instead of manufacturing projects as they did in the past.

Dr. Tran Dinh Thien, Head of the Vietnam Economics Institute, when talking about the FDI from Japan and South Korea, noted that Japanese seem to go more slowly recently, and that they are “not reckless enough,” while South Korea has been “making unforeseen breakthroughs.”

Thien noted that with their inherent cautiousness, Japanese investors may lose great opportunities into the hands of the investors from South Korea.

Japanese came to Vietnam some years ago with industrial projects, from electronics, motorbike, car to cement and computer. The investment from the sakura country continues flowing to Vietnam nowadays, but it is easy to realize that the new projects mostly have small and medium scale.

Tran Van Tho from Waseda University in Tokyo affirmed on Thoi bao Kinh te Saigon that Japanese would continue pouring their money into the manufacturing sector.

If considering the statistics released recently about the investment proportions in business fields, one may realize the increase in the proportion of the investment projects the service sector. However, if considering the exact number of projects and their value, this would give another result.

According to the Ministry of Planning and Investment (MPI), Japan is now the biggest foreign investor in Vietnam with 3,100 registered projects capitalized at $34.5 billion in total. These include 1,150 manufacturing, processing projects, which accounts for 84.14 percent of the total investment capital.

In the first 11 months of 2013, Japan registered $5.68 billion worth of FDI in Vietnam.

Tho admitted that the investment projects of South Korean investors recently like Samsung and LG, are the big projects ones. However, Japanese investors target a wider range of business fields, while there have been more and more investments from Japanese small and medium enterprises into industries.

Dinh Van Phuoc, former CEO of Tsubaki Yamakyu Chain Co, a chain manufacturing company headquartered in Tokyo, also thinks that Japanese investors are not slow in making investment in Vietnam.

Phuoc said on Thoi bao Kinh te Saigon that caution is the Japanese typical character. In general, Japanese tend to make long term investment, and it is understandable that they have to think carefully before making investment decisions.

“Vietnam is not a big market for Japanese. Japanese investors eye Vietnam as a production base from which products are exported to other countries. Japanese have many other non-Vietnam choices,” he said.

He went on to say that once Japanese make investment decisions, they always strive to turn their businesses into small communities, where workers can work for a lifetime.

Regarding the problems in the program on helping Vietnam develop supporting industries, Tho said the problems have been existing for a long time already. However, he believes the situation would be improved thanks to two new factors.

First, the government of Vietnam has laid down detailed policies on developing its supporting industries. And second, more and more Japanese small and medium enterprises have invested in Vietnam in recent years.

TBKTSG