Strengthened bilateral ties between the two countries as well as Vietnam’s high economic growth and improved business environment will usher in a new wave of Japanese investment in the South East Asian country, experts said.

Many Japanese manufacturers plan to invest in Vietnam 

In a recent visit to Japan, Prime Minister Nguyen Xuan Phuc met with many big Japanese investors operating in various sectors from infrastructure, property, aviation to finance, banking and retail sales such as All Nippon Airways Co., Ltd, AEON Co Ltd., Mitsubishi UFJ Financial Group, Mitsui and Mitsubishi to discuss their upcoming business and investment plans in Vietnam.

At the meeting, Japanese investors said they are planning to pour billions of US dollars in Vietnam, across many sectors. This has been expected to be a new Japanese investment wave in Vietnam in the time to come.

AEON Co Ltd., for example, is planning to produce Vietnamese-made products which will be sold at the group’s mall chains both in Vietnam and across the world, Okada Motoya, president and CEO of AEON said.

Besides, AEON is also planning to invest in private credit in order to boost advanced transactions in Vietnam. In addition, under its business strategy in Vietnam, AEON is expected to develop dozens of shopping malls in the country.

Seiji Imai, Head of Mizuho Bank for Asia and Oceania also believed there will be a new wave of investments from Japanese medium and small-sized enterprises, who possess exclusive and advanced technology but mainly focus on the domestic market, to Vietnam. 

Vietnam will be the first destination Japanese investors take into account when investing overseas, Imai said, adding after the first wave of Japanese investment, which was led by large firms in manufacturing, the second investment wave will happen for sure.

Appealing investment destination

Umeda Kunio, Japanese Ambassador to Vietnam, told the local media that many Japanese companies are very interested in conducting business in Vietnam in the fields of agriculture, healthcare, retail, and beauty services as well as urban development - such as projects in the northern part of Hanoi, the Binh Duong project, subway route No.1 in Ho Chi Minh City, and subway routes 1 and 2 in Hanoi.

Vietnam is ranked third in a recent survey on the overseas deployment of Japanese manufacturing industries by the Japan Bank for International Co-operation, and second in the same survey if it is limited to only medium- and small-sized enterprises, Kunio said.

A survey conducted last year by the Japan External Trade Organization (JETRO) among Japanese businesses operating in Vietnam showed that up to 70 per cent planned to expand operations in the country. This represents a high percentage compared to other countries in ASEAN. Under a Japanese survey questioning participants about countries and territories for potential expansion plans, the proportion of businesses choosing Vietnam has increased over three consecutive years, indicating that the country continues to be a destination of interest for many Japanese investors.

According to Kunio, the attractiveness of Vietnam as an investment destination is its market potential, relatively inexpensive and diligent workforce, and political stability. Based on several economic forecasts, Vietnam’s economic growth is predicted to remain high in 2018, and the Japanese investment into Vietnam this year is also expected to be at a high level.

Reports from the Foreign Investment Agency showed that Japanese investment to Vietnam has been on the rise over recent years. As of September 20, Japan had 3,900 valid investment projects worth a total registered capital of US$55.78 billion in Vietnam. In the first nine months of this year, Japan was Vietnam’s largest foreign investor, with total investment capital of US$7 billion.

Hanoitimes