Vietnam surpasses China in FDI prospects
Vietnam is the economy with greatest potential in FDI attraction
Chairman of the Vietnam Chamber of Commerce & Industry (VCCI) Vu Tien Loc, at the 2018 Vietnam Business Forum on December 4, cited a PwC report as saying that Vietnam has, for the second consecutive time, surpassed China as the economy with the greatest potential in FDI attraction.
The survey was conducted by PwC of 1,200 leading CEOs in Asia Pacific.
The Free Trade Agreements (FTAs) that Vietnam has signed with bilateral and multilateral partners have helped attract foreign companies. At least 34-40 percent of polled businesses believe their revenue will see improvement thanks to FTAs.
The FTAs that Vietnam has signed with bilateral and multilateral partners have helped attract foreign companies. At least 34-40 percent of polled businesses believe their revenue will see improvement thanks to FTAs.
Dinh Trong Thinh from the Finance Academy confirmed that Vietnam is the leading country in the world in signing regional, bilateral and multilateral FTAs. The tax policies, investment environment and conditions for market access in Vietnam are all very open.
Vietnam has cut tariffs to nearly zero on products from ASEAN. In addition, Vietnam has ratified the CPTPP, which means that it will lower tariffs on products from 11 member economies. Vietnam is also proceeding with the signing and ratification of an FTA with the EU.
“With 12 agreements under implementation and four others on the horizon, Vietnam is considered the fastest opening economy with the highest number of FTAs with broadest commitments in different business fields,” he said.
“Foreign investors are wise enough not to miss Vietnam, which has low tariffs and non-tariff barriers. In Vietnam, they can enjoy great incentives and have full rights like Vietnamese investors,” he said.
“The investment environment in Vietnam is extremely good which explains the high capability in attracting FDI,” he concluded, adding that Vietnam is also following international practice in governance, including institutional reform.
Agreeing with Thinh, Pham Tat Thang, a senior researcher at the Ministry of Industry and Trade, said that the signing of many FTAs, including CPTPP, has turned Vietnam into an economy with the greatest potential in attracting FDI.
Looking back at the FDI attraction history, Thang said that Vietnam attaches importance to FDI and tries to reform. The higher positions in international institutions’ rankings in business environment and institutional reform show the great efforts made by Vietnam.
China once was the most attractive market for FDI and was considered the world’s production base. However, with increased labor costs and the US-China trade war, some foreign investors are leaving China for other markets.