Illustrative photo (Photo: baodautu.vn) Hanoi (VNA) – Although Vietnam always eyes to attract investors from US andEurope, intra-Asian investors are so important to the country, especially sinceforeign direct investment (FDI) is slowing down globally due to the COVID-19pandemic’s impacts and geopolitical conflicts.
Amongthe 10 biggest investors in Vietnam, eight are from Asia.
AssessingVietnam's investment partners, many economic experts said that FDI into Vietnammainly comes from Northeast Asian countries and more recently China.
JoonsukPark, head of International Subsidiary Banking and Wholesale Banking at HSBCVietnam, said that FDI flows into Vietnam play a quintessential role andcontributes to the growth story of the country.
“ForeignDirect Investments have been one of the key catalysts spurring and transformingVietnam into one of the most open economies in the region,” he said.
Astudy by HSBC showed FDI investors or those regional and global multinationalcompanies operating in Vietnam effectively contribute to over 80% of the totalexports out of Vietnam and more than 25% of local investments. Ofthose multinational companies, the intra-Asian multinational companies composethe bulk.
Thevalue of attracting the intra-Asian multinationals also translates into Vietnamstepping up not only in the value-add ladder in terms of export products but also concurrently in expanding the depth and breadth of the domestic consumptionmarket.
“Thesetop intra-Asian investors continue to maintain their focus on Vietnam,” theHSBC official said.
Theannual investment inflows remain steady. Already coming into 2023, HSBC haswitnessed interest from several global intra-Asian multinationals engagingacross a wide array of sectors including retail, semiconductors, electronics,mobile parts, plastics, renewables, and logistics, looking to either expand orinvest newly into the country.
“Replenishingthe FDI flow back into Vietnam is of critical importance for both export andthe domestic consumption market growth. And the intra-Asian flow cannot beunderestimated. The intra-Asian investors have a keen understanding of theVietnamese market from both a cultural and business practice perspective. Thegeographical proximity allows for the ease of travel for those Head Officedecision makers,” said Joonsuk Park.
Headded that many of the Asian markets themselves are export-oriented and henceunderstand the innate advantage of leveraging Vietnam’s rich free tradeagreement platform. The growing middle income and wealth story in Vietnam alsounderpins their efforts to further penetrate the local domestic consumptionmarket./.
