Vietnam to lure 38 bln USD in FDI in 2023

The Republic of Korea, Japan and Taiwan (China) are Vietnam’s major sources of foreign investment.
Tăng cường hợp tác đầu tư Việt Nam-Hàn Quốc: Định hướng và giải pháp*
The Republic of Korea is among the largest investors pouring capital into Vietnam last year.

According to the Foreign Investment Agency under the Ministry of Planning and Investment (MPI), Vietnam is likely to attract 36-38 billion USD in foreign direct investment (FDI) in 2023. The figure was nearly 22.4 billion USD in 2022.

Deputy Director of the Foreign Investment Agency (FIA) Do Van Su said disbursement of foreign investment this year is expected to hit 22-23 billion USD.

Su acknowledged that the opening of China’s economy might affect Vietnam's foreign investment attraction, adding that China remained the leading investment destination in the region, so when they opened up, capital will flow into this market while that to Vietnam and other economies in the region will be limited.

On the contrary, the investment capital movement of the Republic of Korea (RoK) , Japan, and Taiwan (China) will be accelerated. This shift will be accelerated until 2025, and Vietnam will be a preferred investment destination for investors, he added.

Currently, the RoK, Japan and Taiwan (China) are Vietnam’s major sources of foreign investment and they have constantly increased their investments in Southeast Asian countries.

According to FIA, essential factors for FDI to continue to prosper in 2023 include economic growth results in 2022 and endless efforts of authorities in improving the business investment environment, creating trust with investors, and effectively exploiting the advantages of free trade agreements.

Minister of Planning and Investment Nguyen Chi Dung said that Vietnam had adopted a selective approach to attracting foreign investment inflows which will contribute to the country's implementation of the sustainable development strategy.

Priority will be given to projects using new and green technologies, with high added value, modern corporate governance, and high spillover effects, ensuring technology transfer, and being integrated with global supply and production chains, Dung said.

To lure more foreign investment, he emphasised the importance of developing innovation and financial centres at the regional and international levels, creating a driving force for socio-economic development in the coming period, adding that stabilising the macro-economy, improving infrastructure and the quality of human resources will be also needed.

So far this year, Vietnam saw good signs in foreign investment attraction as nearly 900 million USD of FDI has been registered in the northern province of Bac Giang.

On January 7, China’s Yadea Group said it will invest 100 million USD in a factory to manufacture and assemble electric motorcycles with an expected capacity of about 2 million vehicles per year in the province's Tan Hung Industrial Park. Covering an area of 23.2ha, the project will be implemented in the second quarter of 2023.

Earlier on January 2, Bac Giang province granted an investment certificate to Singapore’s Ingrasys Pte Ltd, the Fulian precision technology factory project investor signed an MoU with Chinese investor Hainan Longi Green Energy Technology Co Ltd on a project to produce solar panels.

Both projects will be conducted from the first quarter of 2023, with a combined registered capital of about 761 million USD.

Foreign investment in Vietnam remained a bright spot in the country’s 2022 economic panorama, despite experiencing a year-on-year decrease in value, thanks to its disbursement reaching a five-year high.

Data from the MPI showed as of December 20, there were 2,036 newly-registered FDI projects worth 12.45 billion USD, up 17.1% year-on-year in the quantity, but down 18.4% in value.

In addition, 1,107 projects had their capital raised with a total amount of 10.12 billion USD, up 12.4 % and 12.2 % year-on-year, respectively.

Capital contributions and share purchases (foreign indirect investment or FII) were worth 5.15 billion USD, down 25.2 %. This figure made the total foreign investment in the country in 2022 top 27.7 billion USD.

Meanwhile, FDI disbursement in 2022 hit nearly 22.4 billion USD, up 13.5% year-on-year, making it the highest amount in the past five years, the General Statistics Office (GSO) reported.

By the end of last year, the country was home to 36,278 valid projects with a total registered capital of approximately 438.7 billion USD. The accumulated realised capital of foreign investment projects topped 274 billion USD, equalling 62.5 % of the total valid registered investment capital.

Foreign investors poured funds into 19 out of the 21 sectors in the national economic classification system, of which the processing and manufacturing industry maintained its lead in terms of attracting FDI with a combined investment of over 16.8 billion USD, accounting for 60.6 % of the country’s total.

Among the 108 nations and territories pouring capital into Vietnam this year, Singapore ranked first with 6.46 billion USD. It was followed by the RoK and Japan.

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(Source: VNA)