Foreign direct investment (FDI) inflows in Vietnam will soon recover after the COVID-19 pandemic is brought under control, said Takeo Nakajima, Chief Representative of the Japan External Trade Organisation (JETRO) in Hanoi.
Speaking at a Vietnam-Japan investment connection seminar on September 9, Nakajima said that Vietnam’s FDI attraction had increased constantly up until 2019, with many global businesses, including those from Japan, having strengthened their investment in the country.
Since the beginning of the year, FDI inflows in Vietnam have slowed down due to the impact of the disease; however, it is just a short-term pause and capital flow will recover in the post-COVID-19 period, he said.
The JETRO official attributed the slowdown in FDI inflows from Japan to the fact that many Japanese enterprises operating in Vietnam are confronting numerous difficulties caused by COVID-19. According to JETRO’s survey results, up to 65% of said businesses have reported a sharp fall in revenue. In addition, Japanese firms have also hesitated after the return of the pandemic to the country at the end of July.
Nonetheless, Nakajima said the proportion of Japanese companies with reduced turnover in Vietnam is still much lower than that in other countries in the region. Notably, only 5% of the enterprises reported a revenue reduction of over 50%, which is a relatively small figure.
Elaborating upon his statement on the prompt recovery of FDI inflows in Vietnam, he said that the Vietnamese Government has issued many policies to attract and create favourable conditions for foreign companies, including those from Japan.
In addition, Vietnam has joined many free trade agreements (FTAs) and economic partnership agreements (EPAs), and is gradually participating in more global supply chains. Most international financial institutions, including the International Monetary Fund (IMF), have forecast that Vietnam will be the only nation in Southeast Asia to register positive growth this year. This is a bright spot on the gloomy economic picture of the whole region.
The Vietnam-Japan trade exchange seminar was held virtually by the Ministry of Industry and Trade’s Trade Promotion Agency, in coordination with the ASEAN-Japan Centre (AJC), JETRO and Vietnam’s trade office in Japan, with the participation of hundreds of businesses from the two countries.
Addressing the plenary session, AJC Secretary-General Masataka Fujita pointed out the negative effects of COVID-19 on the Asian economy in general and Vietnam in particular, emphasising the need to strengthen cooperation between the two countries to overcome the difficulties caused by the pandemic.
For his part, Director of the Vietnam Trade Promotion Agency Vu Ba Phu affirmed that after 47 years of bilateral diplomatic relations, Japan continues to be an important investment partner of Vietnam. In recent years, the wave of Japanese investment in Vietnam has constantly increased in terms of both the number of enterprises and their investment capital.
Enhancing the attraction of Japanese investment in the near future, along with the application of measures to encourage technology transfer, will help improve Vietnam’s technology level and production capacity, contributing to realising the goal of bringing Vietnam to basically become a modern industrial country.
At the seminar, Vietnamese Trade Counsellor in Japan Ta Duc Minh, and representatives of Vietnam’s Vinh Phuc, Quang Ninh and Nghe An provinces presented the current situation and solutions to attract further FDI from Japan.
By NDO
Related
Source: Vietnam Insider