Vietnam enhances positions in global value chain
HCM City (VNA) – The attraction of large foreign direct investment (FDI) inflows from the US and Europe, especially into industries with high added value such as manufacturing, technology and pharmaceuticals, is a positive signal about Vietnam’s economic development and international cooperation as well as the country's efforts in improving its position on the global value chain, according to Savills Vietnam experts.
Statistics
from Savills Vietnam, a property consultancy firm, showed that there were 2,508 FDI projects of EU countries
in Vietnam as of June, with total registered capital of 28.91 billion USD. The
figure represents a significant increase compared to 18 billion USD in 1,623
projects in 2016.
The Q3 Business Confidence Index (BCI) report of the European Chamber of Commerce in
Vietnam (EuroCham) released in mid-October showed that more than two years after its implementation, the
European Union -Vietnam Free Trade Agreement (EVFTA) is continuing to have a
positive impact on Vietnam's business landscape. More than 60% of businesses think
the deal is beneficial, with the top benefit being tax cuts, followed by
improved competitiveness, reduced trade barriers, and expanded partnerships
with local firms and increased access to the Vietnamese market.
As
for the US market, the recent visit of President Joe Biden along with upgrading
their comprehensive cooperative relationship, the interest of investors in
this market is expected to increase in the coming time.
According
to John Campbell, manager of Industrial Services at Savills Vietnam, although
this event only took place about a month ago and will take time to see clear
impacts, many US investors have shown their interest in projects in Vietnam.
A
Savills 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 in
the global value chain. Specifically, in the period, the export value of
electronic, phones and machinery products increased by 193%, 68% and 336%
respectively.
Vietnam
is focusing on attracting high value-added investments by improving its
workforce and infrastructure while creating favourable conditions for small and
medium-sized enterprises and support industries, Campbell said, adding that
these efforts have been recognised by many large investors and Vietnam have
been included in their future development plans.
Vietnam's
BCI in the third quarter of 2023 has increased to 45.1% from 43.5% in the
second quarter of this year, according to EuroCham.
The country's global investment attractiveness remains strong, with 63% of surveyed
businesses ranking the country in the top 10 FDI destinations, it said. In
particular, 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.
He
went on to say that addressing administrative burdens, unclear regulations, and
permitting hurdles is crucial to achieving progress.
Campbell
suggested that to attract world-leading large companies, it is necessary for industrial
park developers in Vietnam to focus on value-added services and incentives in
addition to price and rentals such as market entry services, human resources and
legal support, management services, sustainability initiatives and working with
professional industrial real estate agencies./.