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Southbound wave to bring Japanese, South Korean, Taiwanese investors to VN

VietNamNet Bridge - Taiwan has been pursuing a ‘southbound policy’, shifting investments to countries in southern Asia. The movement has also arisen among Japanese and South Korean enterprises.

VietNamNet Bridge - Taiwan has been pursuing a ‘southbound policy’, shifting investments to countries in southern Asia. The movement has also arisen among Japanese and South Korean enterprises.


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Vietnam is one of the priority choices for Japanese investors



With the southbound policy, the Taiwanese government is encouraging businesses to make investments in countries such as Vietnam, Singapore, Indonesia and Malaysia. Of these, Vietnam is the top choice.

“Vietnam is one of the priority choices for Taiwanese investors when implementing the southbound policy,” said Richard R.C. Shih, Chief Representative of Taipei Economic and Cultural Office in Vietnam, at a recent event.

Chair of the Vietnam Chamber of Commerce and Industry (VCCI) Vu Tien Loc believes that multinational corporations’ (MNCs) business strategies view Vietnam as an important destination.

Japanese, South Korean and Taiwanese businesses once made big investments in China. However, they tend to head south, and Vietnam is the first-choice when implementing the policy which aims to disperse risks and create new competitiveness.

“Japanese, South Korean and Taiwanese businesses once made big investments in China. However, they tend to head south, and Vietnam is the first-choice when implementing the policy which aims to disperse risks and create new competitiveness,” Loc said at a press conference on announcing the organization of VBS 2018 (Vietnam Business Summit).

Analyzing the southbound investment trend, Loc said MNCs follow two principles when choosing places for their business. First, the business environment must be favorable with low costs. Second, investors need to ‘put eggs into many baskets to disperse risks’.

Investors once made big investments in China, a vast market which had very low production costs. Now they have to reconsider their investment strategy because of the higher production costs in China and escalating trade conflicts.

All these make China less attractive in the eyes of foreign investors. In these circumstances, relocating investment projects out of China to ASEAN countries is a wise move.

“Japanese enterprises are going this way. The South Korean government has also announced the new southbound policy, and so has Taiwan,” Loc said, adding that Vietnam, which is near the vast Chinese market, is a good choice for investors.

Besides the geographical position, Vietnam has three other advantages that attract investors: a stable political situation, large market, and young and cheap labor force.

A survey carried out by JETRO on Japanese business performance in Vietnam in 2017 found that 65.1 percent of businesses made a profit, a 2.3 percentage point increase over 2017. 

Meanwhile, 70 percent of enterprises plan to scale up their business in Vietnam and continue considering Vietnam an important investment destination.

Loc was reminded of the words of US President Donald Trump in his speech at APEC CEO Summit in 2017 in Da Nang that Vietnam is the ‘very heart of the Indo-Pacific’.


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