Production of electronic devices in a company in Hung Yen province. (Photo: VNA) HCMCity (VNA) – The attraction of large foreign direct investment(FDI) inflows from the US and Europe, especially into industries with high addedvalue such as manufacturing, technology and pharmaceuticals, is a positivesignal about Vietnam’s economic development and international cooperation as wellas the country's efforts in improving its position on the global value chain, according toSavills Vietnam experts.
Statisticsfrom Savills Vietnam, a property consultancy firm, showed that there were 2,508 FDI projects of EU countriesin Vietnam as of June, with total registered capital of 28.91 billion USD. Thefigure represents a significant increase compared to 18 billion USD in 1,623projects in 2016.
The Q3 Business Confidence Index (BCI) report of the European Chamber of Commerce inVietnam (EuroCham) released in mid-October showed that more than two years after its implementation, theEuropean Union -Vietnam Free Trade Agreement (EVFTA) is continuing to have apositive impact on Vietnam's business landscape. More than 60% of businesses thinkthe deal is beneficial, with the top benefit being tax cuts, followed byimproved competitiveness, reduced trade barriers, and expanded partnershipswith local firms and increased access to the Vietnamese market.
Asfor the US market, the recent visit of President Joe Biden along with upgradingtheir comprehensive cooperative relationship, the interest of investors inthis market is expected to increase in the coming time.
Accordingto John Campbell, manager of Industrial Services at Savills Vietnam, althoughthis event only took place about a month ago and will take time to see clearimpacts, many US investors have shown their interest in projects in Vietnam.
ASavills Vietnam's research pointed out that in 2016-2022 period, a sudden increase in the export of electronics and phone reflects an improvement in Vietnam's position inthe global value chain. Specifically, in the period, the export value ofelectronic, phones and machinery products increased by 193%, 68% and 336%respectively.
Vietnamis focusing on attracting high value-added investments by improving itsworkforce and infrastructure while creating favourable conditions for small andmedium-sized enterprises and support industries, Campbell said, adding thatthese efforts have been recognised by many large investors and Vietnam havebeen included in their future development plans.
Vietnam'sBCI in the third quarter of 2023 has increased to 45.1% from 43.5% in thesecond quarter of this year, according to EuroCham.
The country's global investment attractiveness remains strong, with 63% of surveyedbusinesses ranking the country in the top 10 FDI destinations, it said. Inparticular, 31% ranked Vietnam in the top three investment locations.
EuroCham Chairman Gabor Fluit, however, said that while promising Q3 GDP and FDI growth is seen, issues persist - especially with exports and real estate.
Hewent on to say that addressing administrative burdens, unclear regulations, andpermitting hurdles is crucial to achieving progress.
Campbellsuggested that to attract world-leading large companies, it is necessary for industrialpark developers in Vietnam to focus on value-added services and incentives inaddition to price and rentals such as market entry services, human resources andlegal support, management services, sustainability initiatives and working withprofessional industrial real estate agencies./.
