Vietnam continues to be a leading destination for FDI
|Currently, about 50% of Samsung Group's phones and tablets globally are manufactured in Vietnam. (Photo: nld.com.vn)|
Foreign businesses continue to place their trust in Vietnam by injecting more than US$13 billion into registered projects throughout the country during the first six months of the year, despite a general downward trend occurring globally.
Many tech giants and multinational companies such as Samsung, LG, Google, and Microsoft have developed plans to shift their investment in new production lines in Vietnam.
At a recent Vietnam - Korea business forum, Cho Hyun Joon, chairman of Hyosung Group, stated that the group would still consider Vietnam to be a strategic and key market moving forward. He went on to reveal that Hyosung is expected to continue to expand its operation and is looking towards sustainable development in the country, especially in high-tech fields.
Priyamvada Srivastava, general director of Procter & Gamble Vietnam, during a recent meeting held with leaders of Binh Duong province, also revealed that the firm will invest an additional US$100 million to expand the production line at its Ben Cat factory. Currently, P&G has two factories in Binh Duong with a total investment capital of US$300 million.
These represent positive signs, meaning that FDI businesses consider the Vietnamese market to be a leading destination for their investment.
The World Bank (WB) noted that over the past four decades, from 1986 to 2022, Vietnam has been a success story in terms of attracting foreign direct investment thanks to an attractive local investment environment, a stable political background, coupled with high potential for economic growth. It has even maintained this positive trend amid global FDI inflows slowing down in the first months of 2023.
WB statistics highlight that Vietnam jumped from 123rd to 28th place in global foreign investment attraction ranking for the period 1989 to 2022, with foreign investment capital into the country increasing by 4,634 times.
At present, more than 143 countries and territories have poured investment capital into Vietnam. Notably, the investment capital of a number of major partners such as Singapore, Japan, and the Republic of Korea has increased year on year, with the FDI wave tending to focus on industries with a high content of gray matter and high technology such as manufacturing industry, software industry, electronics and information technology, pharmaceuticals, and precision mechanics.
The General Statistics Office (GSO) recently unveiled statistics showing that FDI businesses poured US$13.43 billion into the country in the first six months of this year, equaling 95.7% of the corresponding period from last year.
In order for Vietnam to continue to be an attractive destination for foreign investors, the GSO has suggested that the Government implement effective solutions in order to attract quality FDI inflows over the coming months amid a global slowdown.
Phi Huong Nga, an official of the GSO, stated that besides the growth momentum, Vietnamese FDI attraction is still affected by a number of external factors such as complicated and unpredictable international developments and tougher political conflicts in some regions around the world.
These factors have contributed to put significant downward pressure on global FDI inflows in 2022 and continuing into this year, thereby negatively affecting overseas investment flows of major economies that are Vietnamese investment partners, analysed Nga.
In his opinion, Michael Kokalari, chief economist of VinaCapital, predicted that FDI inflows into the Vietnamese market would remain stable despite the enforcement of the global minimum tax policy, starting from January 1, 2024.
He said FDI inflows will continue to be one of the country’s key growth drivers over the coming years. As a result, Vietnam will continue to be a leading destination for FDI, especially from multinational companies looking to produce goods for export and seeking an alternative or additional production base in the near future.