Prime Minister Nguyen Xuan Phuc encouraged Japanese business to invest in infrastructure development, renewable energy, processing and manufacturing, supporting industries, high-tech agriculture, logistics, aviation industry, among others.

Prime Minister Nguyen Xuan Phuc at the meeting. Source: VGP.

Japanese and Vietnamese companies have announced their commitment to invest a total of nearly US$10 billion in Vietnam, the government portal and Vietnam Television reported.

The agreements and investment licenses involved Aeon, Mitsui, Mitsubishi UFJ Lease & Finance, Eiwakai Medical, Vietnam's T&T Group and Vietjet, among others. Notably, T&T Group will partner with Mitsui & Co., LTD to develop smart city and energy projects worth a combined US$1.2 billion.

Japan currently is Vietnam's largest ODA donor, the second largest FDI investor with over US$52 billion and the fourth largest trading partner with US$33 billion, PM Nguyen Xuan Phuc said in a meeting with some 1,200 Japanese and Vietnamese businesses in Tokyo on October 10. 

Japan is also the largest investor in Vietnam with registered capital of over US$9 billion in 2017 and US$7 billion in the first eight months of 2018, accounting for 28.8% of total registered capital, Phuc added. 

JETRO's Chairman Hiroyuki Ishige said that the record capital inflow from Japan to Vietnam last year was just the beginning, expecting economic cooperation between the two countries to a new height after Phuc's visit. 

Meanwhile, Horofumi Takinami, Japan's vice minister of Economy, Trade and Industry expected Vietnam to soon approve the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), adding that Japan will cooperate with universities in the Mekong region in training human resources. 

According to Phuc, Vietnam has been prioritizing efforts to improve its business and investment environments, which have been recognized by international organizations. 

Phuc referred to a survey conducted last year by JETRO among Japanese business operating in Vietnam saying that up to 70% of the businesses planned to expand their operations. In the survey, some 88% of the correspondents said that the main reason for their plans to expand in Vietnam is the increasing turnover in their Vietnam-based subsidiaries, which was attributed to the market size, growth, political and social stability, and cheap labor costs.

Moreover, 65% of Japanese businesses operating in Vietnam reported a profit, up 2.3 percentage points from the 2016 survey. 

Five years ago, Vietnam approved a industrialization strategy within the framework of Vietnam - Japan cooperation through 2020, with a vision to 2030, which focuses on developing six priority industries, including electronics, agricultural machinery, agricultural fishery product processing, shipbuilding, environment and energy saving, and automobiles and auto parts manufacturing. 

In the context of the Fourth Industrial Revolution, Vietnam's labor force has shifted towards industries and sectors with high added value, using advanced technologies and high quality human resources, Phuc informed.

The PM encouraged Japanese business to invest in infrastructure development, renewable energy, processing and manufacturing, supporting industries, high-tech agriculture, logistics, aviation industry, among others. 

Phuc also pointed to new investment opportunities in Vietnam, following the ongoing privatization process of state-owned enterprises (SOEs) in fields of transportation, aviation, infrastructure, agriculture, telecommunication, trade, services, tourism, among others.

He also expected Japanese enterprises with strong financial capabilities and corporate governance to become strategic partners of Vietnamese firms. 

At present, Vietnam is creating favorable conditions for the development of small and medium enterprises (SMEs), especially start-ups. This should be an opportunity for foreign investors exploring investment options in Vietnamese start-ups, Phuc noted. 

Phuc stressed that Vietnam's business and investment environments will constantly be improved. By coming to Vietnam, Japanese enterprises should target a sustainable and long-term development, which would be a win-win for all parties involved, Phuc concluded. 

Hanoitimes