Japanese investors continue to be impressed by Vietnam's investment policies, but are increasingly worried about power shortages and high inflation.

Business representatives from Japan 's Aichi Perfecture gathered on last week in HCM City at a seminar to discuss Vietnam 's investment climate and ways to improve the efficiency of their operations in Vietnam .

Aichi Perfecture is one of the largest economic and industrial hubs in central Japan . To date, more than 80 companies from Aichi Perfecture have invested in Vietnam , of which 35 are in the south and 45 in the north.

Speaking at the seminar, Do Nhat Hoang, head of the Ministry of Planning and Investment's Foreign Investment Agency, admitted that the electricity shortage would not boost the country's economic development.

"This will prevent Vietnam from reaching industrial-country status by 2020," he said.

However, the Ministry of Industry and Trade (MoIT) has proposed to the Government several measures to deal with power shortages, including offering preferential support to investors in the electricity sector.

They will also receive support for site clearance and extensions on payments for bank loans so the electricity projects can be implemented soon.

"For inflation control, the Government has made an effort to tightly control the price of consumer goods, and even make compensation to maintain electricity price stability to ensure the best business environment for investors, Aichi investors in particular," Hoang said.

The country has also improved the laws on investment in an effort to attract more foreign investment.

On September 5, the Ministry of Investment and Planning will organise a seminar in Japan on attracting investment for the supporting industry in Vietnam .

Japan is among the biggest investors in Vietnam . It ranks fourth among countries that have FDI in Vietnam , with 1,552 investment projects and total registered capital of 21.36 billion USD.

In the past six months, 86 new Japanese FDI projects with total investment capital of 303 million USD have been registered.

Nguyen Hoang Ha from the Vietnam Development Strategy Institute said "Infrastructure is weak and a big barrier in economic development. However, Vietnam has mapped out a strategy on infrastructure development in the southern key economic area by 2020."

Accordingly, a series of railways, waterways and highways will be upgraded or developed.

The seminar was organised by the Aichi Support Desk./.