Vietnam prepares for foreign investment that is turning inward
International Business News – On the afternoon of September 21, the Foreign Investment Agency of the Ministry of Planning and Investment of Vietnam held a meeting on the introduction of foreign capital in the first eight months of 2022 in Binh Duong Province, and discussed measures to usher in the foreign investment that is turning to Vietnam and is expected to increase significantly.
Du Yihuang, director of the Bureau of Foreign Investment, said that as of August 2022, the registered capital of foreign-invested enterprises in Vietnam reached US$16.7 billion, a year-on-year decrease of 12.3%. However, funds in place amounted to $12.8 billion, up 10.5% year-on-year, and additional funds amounted to $7.5 billion, up 50.7%.
It is worth noting that the quality of investment in each project has improved, with an average of 14.7 million US dollars per project, which is higher than the level in 2021 (one project exceeds 10 million US dollars). This result shows that the scale of each investment project is larger and its quality is higher.
Among the southern provinces and cities, Ho Chi Minh City ranks first in foreign investment, followed by Binh Duong, Dong Nai, Ba Ria-Vung Tau, Long An and Tay Ninh. Among them, in the first eight months of the year, Binh Duong Province introduced a total of nearly 2.6 billion US dollars of foreign investment, a year-on-year increase of 72%.
Binh Duong province continues to be an attractive destination for foreign investors. So far, Binh Duong has attracted 4,063 foreign-invested projects from 65 countries and regions, with a registered capital of US$39.5 billion.
Du Yihuang said that due to the recent turmoil in the world, the interruption of various supply chains after the new crown pneumonia epidemic, and the pursuit of a “zero new crown” policy by China, the world’s “big factory”, various investors are planning to adjust their investment funds and invest more. Funds move to other markets. This will be an opportunity for the southern provinces and cities and even Vietnam.
To capitalize on this opportunity, provinces should strengthen regional connectivity to form an attractive ecosystem for technology investors. One of the most attractive ecosystems is electronic chips.
Vietnam is expected to attract projects from South Korea in electrical, electronic, processing and manufacturing industries. At the same time, wholesale and retail, non-production, auxiliary industries and other fields will continue to attract the attention of Japanese investors and enterprises.
According to the Foreign Investment Agency, technology groups will still give priority to Vietnam as a destination for investment or expansion in the next two to three years, especially in the fields of manufacturing, technology, pharmaceuticals and energy.
The representative of the Foreign Investment Agency also believes that in order to grasp the trend of global production chain transfer and attract foreign investment, provinces and cities should strive for opportunities to attract high-quality foreign investment that meets Vietnam’s needs.
It is expected that foreign investment will maintain its growth momentum in 2022 and will gradually open up the economies of various countries in the following years. When adapting to the new normal, foreign investment will break through growth.
In addition, Vietnam also needs to prepare a labor force with skilled occupational skills and meet the requirements of high-tech foreign investment projects, focus on the development of digital technology platforms and online services, simplify administrative procedures, and create convenient conditions for enterprises and investors.