Japanese businesses are shifting investment from manufacturing to the service industry.

Japanese enterprises are tending to shift investment from the manufacturing sector to the service sector, especially the retail sector in Vietnam.

Japanese businesses are shifting investment from manufacturing to the service industry.

Japanese enterprises are tending to shift investment from the manufacturing sector to the service sector, especially the retail sector in Vietnam.

This information was announced by Japanese investors at the Dialogue Conference between the Ho Chi Minh City Government and the Japan Business Association in Ho Chi Minh City (JCCH) on December 9.

At the conference to inform about the investment situation of Japanese enterprises in Ho Chi Minh City, Mr. Quach Ngoc Tuan, Deputy Director of the City Department of Planning and Investment, said that from the beginning of the year to early December 2024, the new investment capital of Japanese enterprises in the City was 3.55 million USD.

Accumulated to date, the total investment capital of Japanese enterprises in Ho Chi Minh City is 8.53 billion USD, ranking 3rd out of 127 countries investing in the city.

Informing investors about the City's investment orientation in the coming time, Mr. Tuan said that the City aims to attract investment in high technologies such as semiconductor industry; automation, AI technology...

In addition, the City is mobilizing resources and attracting investment to become an international financial center.

Japanese investors reflect on some remaining issues when dialogue with Ho Chi Minh City leaders

On the investor side, Mr. Nozaki Takao, Chairman of the Japanese Business Association in Ho Chi Minh City (JCCH), said that from April 2024 to now, JCCH has welcomed 56 new member businesses, bringing the total number of members to 1,078 companies and is approaching the number of 1,100 companies.

With its current scale, JCCH continues to maintain its third position among nearly 100 Japanese Business Associations in countries around the world. Among more than 1,000 members, the Japanese business community headquartered in Ho Chi Minh City accounts for about 70% with 727 enterprises.

Mr. Nozaki Takao assessed that with the growth in population as well as per capita income in recent years, Ho Chi Minh City has become an attractive destination for Japanese investors in the service sector.

Regarding infrastructure, metro line 1 (Ben Thanh – Suoi Tien) will soon officially come into operation, opening up urban development along the metro line. “Japanese enterprises with extensive experience and advanced technologies will likely contribute to urban development along metro line 1,” said Mr. Nozaki Takao.

Talking about the current investment trends of Japanese enterprises, Mr. Nakagawa Motohisa, Vice President and Head of Business Environment Department of JCCH, said that Japanese enterprises are tending to shift investment from manufacturing to service sector, especially retail.

However, currently, Japanese enterprises' investment in the retail sector in Ho Chi Minh City is facing difficulties.

Mr. Nakagawa Motohisa stated that some Japanese enterprises, when applying for a license to establish a second or subsequent retail outlet, have satisfied certain conditions, but according to Decree 09/2018/ND-CP, must still meet the economic inspection criteria (ENT).

According to the reservation clause related to services investment of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) that comes into effect, Vietnam will abolish the requirement for economic checks from January 14, 2024.

However, by August 2024, Japanese investors who are members of the CPTPP agreement and operate in the retail sector when establishing their second or subsequent retail establishments in Ho Chi Minh City will still have to comply with this requirement. This is contrary to the CPTPP agreement and the Law on International Treaties 108.

JCCH proposed that the Ho Chi Minh City Department of Industry and Trade comply with the CPTPP agreement and the Law on International Treaty 108 to abolish economic inspection for Japanese investors when establishing the second or more retail facilities in the city.

After listening to the opinions of Japanese investors, Vice Chairman of the Ho Chi Minh City People's Committee Vo Van Hoan affirmed that the difficulties of Japanese enterprises related to the investment and business environment will be resolved by the City government within its authority or recommended to competent authorities for resolution as soon as possible.

The Vice Chairman of the Ho Chi Minh City People's Committee also requested that Japanese investors must have an orientation to switch to high-tech industries to meet the city's green development orientation and goals.

“I hope that Japanese businesses will continue to trust and choose Ho Chi Minh City as a place to invest, expand production and business, and consider it as a second home,” Mr. Vo Van Hoan emphasized.

Source: https://baodautu.vn/doanh-nghiep-nhat-ban-dang-dich-chuyen-dau-tu-tu-san-xuat-che-tao-sang-nganh-dich-vu-d232043.html