Electronic accessories poduction at Bumjim Electronics Vina's factory (Photo: VNA)
Vietnam and the US have lifted up their relationsto a comprehensive strategic partnership, which is an ideal condition for Vietnam to take advantage ofthe US’s friend-shoring strategy, thus achieving high economic growth andcomprehensive development towards the goal of becoming a high-income country in2045, according to economist Dr. Huynh The Du.
In reality, many US firms have taken specific actions torealise the strategy, including Apple, which has chosen India and Vietnam astheir new production hubs.
However, according to experts, Vietnam should designinvestment support policies immediately to optimise the wave of productionshift, especially in the high-tech field.
Without suitable adjustments, Vietnam may be exhausted inthe FDI race, they held.
Experts from the Republic of Korea, a country with manylarge FDI projects in Vietnam, emphasised that if the country’s tax policiesare ineffective, it will no longer maintain its attractiveness from the investmentenvironment and strength in low-cost workforce.
Economist underlined that amid the increasingly fiercecompetition in FDI attraction, the most important thing for Vietnam is to maintaina stable legal environment and an attractive and transparent businessinvestment environment. In particular, the country must have new supportpolicies for investors who make great contributions to national development anduse large number of workers, and investors in the fields of high technology andgreen energy.
They explained that the presence of high-tech"eagles" will attract satellite businesses, thereby forming andexpanding the technology ecosystem, creating a spillover effect, and minimisingopportunities for low-quality and small-scale projects.
Illustrative image (Source: VNA) A survey by the Vietnam Chamber of Commerce and Industry (VCCI)covering 1,282 FDI enterprises indicated that nearly 83% of FDI enterpriseshave capital of less than 100 billion VND. One-quarter of FDI enterprisesemploy less than 10 employees and 57.4% have less than 50 employees. Regardingrevenue, nearly 25% of FDI enterprises earned less than 3 billion VND (122,875USD) and 77.8% had revenue of less than 100 billion VND in 2022, it said.
Data from the Foreign Investment Agency under the Ministryof Planning and Investment showed that the average capital in each FDI projectin Vietnam is about 15-16 million USD. Although the number of FDI projects increased, the total registered capital reduced as there were fewer large-scale projects, which is a worrying issue.
In the context that FDI has and will continue to be one of theimportant growth drivers for Vietnam, insiders stressed the need for thecountry to take immediate actions to build its strategy to lure more investment with non-tax such as providing support in training and humanresources development, research and development, or assistance in fixed assetinvestment./.
VNA
