Japan stays in lead in FDI in Vietnam

Foreign direct investment (FDI) projects in Vietnam have upbeat prospects in 2019, with Japanese investors continuing to lead the countries and territories having investment projects in Vietnam.

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Vietnam received $35.46 billion in FDI in 2018, equivalent to 98.8 per cent of the previous year’s figure. Statistics from the Foreign Investment Agency under the Ministry of Planning and Investment (MPI) showed that 112 countries and territories invested in Vietnam during the year. Japan took the lead with $8.59 billion, 24 per cent of the total.

In January 2019, FDI projects were estimated to disburse $1.55 billion, up 9.2 per cent against 2018.

According to the MPI, as of January 20 this year, the country granted investment certificates to 226 new projects with a total registered capital of $805 million, up 81.9 per cent compared to the same period in 2018.

Last month, there were 51 countries and territories having investment projects in Vietnam. Japan ranked first with the total investment capital of nearly $364 million, making up 19 per cent of the total. South Korea was second with $349.1 million (18.3 per cent), followed by China’s $307.8 million (16.1 per cent).

Specifically, Kyoshin (Vietnam) Company Limited was granted a certificate on January 17, 2019 to increase investment capital by $134.7 million. This project has been invested by a Japanese investor in Ho Chi Minh City in 1995 with the objective of manufacturing, processing, and exporting electrical components, metal stamping dies, and moulding parts.

Katolec Global Logistics Vietnam Company, licensed on January 18, 2019 with the total investment capital of $65 million was invested by Katolec Corporation (Japan) with the objective of warehousing and storage of goods in Ha Nam.

Another Japanese name is Sews-Components Vietnam Co., Ltd. with Factory No.II, licensed on January 11, 2019 with the total registered investment capital of $64.89 million in Hung Yen, with the objective of building a factory for manufacturing electric and electronic components and parts for automobiles and motorcycles, manufacturing connectors for automobiles and motorcycles.

Goki Nobuta, general director of Thang Long Industrial Park Corporation (Vinh Phuc) said that Japanese investment in Vietnam is increasing strongly. Recently, eight Japanese enterprises have invested in this industrial park. It is estimated that the industrial park will welcome about 80 Japanese investors, according to newswire Vneconomy.

The positive FDI performance in the first month of 2019 shows upbeat prospects for the whole year. However, according to Vo Tri Thanh, former deputy director of the Central Institute for Economic Management (CIEM), investment flows are difficult to predict because the world economy is quite uncertain and is forecast to produce no positive growth in the next year.

A breakthrough in FDI inflows to Vietnam depends on the absorption capacity of the economy and the ways the country calls for quality investment in stable high-tech projects.

Moreover, although the US-China trade war is boosting the China Plus One strategy (encouraging companies that have already invested in China to branch out by opening production facilities in other Asian countries, including Vietnam, Indonesia, Thailand or Myanmar), the world is still unpredictable.