After 50 years of friendship, from "receiving more than giving", Vietnam's economy has gradually gone hand in hand with Japan's, together aiming for many common "sweet fruits".
First Loves
"Vietnam-Japan relations have a relatively unique feature based on trust and closeness between the top leaders of the two countries," Mr. Nguyen Quoc Cuong, Ambassador Extraordinary and Plenipotentiary of Vietnam to Japan for the 2015-2018 term, told VnExpress .
In September 1973, Vietnam and Japan began to establish relations. Japan then implemented a foreign policy based on the Fukuda doctrine - advocating that Japan plays a bridging role, contributing to maintaining peace and stability in Southeast Asia, in which Vietnam plays an important role.
In 1993, Vietnamese Prime Minister Vo Van Kiet visited Japan, marking the first official visit of the Vietnamese Government.
Prime Minister Vo Van Kiet visited Sony's exhibition during his official visit to Japan in 1993. Photo: VNA
A year later, Mr. Murayama Tomiichi became the first Japanese Prime Minister to visit Vietnam since the establishment of diplomatic relations.
Leaders of the two countries also visited and met regularly. Japanese Prime Ministers visited Vietnam 12 times. In contrast, Vietnamese General Secretaries visited Japan 4 times (the first time was in 1995, when Japan was the first G7 country to welcome a Vietnamese General Secretary). Presidents visited Japan 3 times, Prime Ministers 21 times, and National Assembly Chairmen 4 times.
Mr. Abe Shinzo himself has made four official visits to Vietnam. Former Ambassador Nguyen Quoc Cuong, who served a three-year term under the late Prime Minister, assessed Mr. Abe as a positive contributor and granted many exceptions to Vietnam. Except for the US, Vietnam is probably the country he visited the most.
"He shared many times that Vietnam is 'very special, always in his heart' and that Vietnamese people are loyal to friends," Mr. Cuong recalled.
The former ambassador recounted that, in the late Japanese prime minister's assessment, Vietnamese people always treated him with affection "like close friends" every time he visited Vietnam or a Vietnamese leader visited Japan, regardless of whether he was still in office or not.
'Sweet fruit' in Vietnam
The camaraderie between senior leaders is constantly maintained and translated into action.
Prime Minister Pham Minh Chinh presented Japanese Prime Minister Kishida Fumio with a calligraphy piece "Sincerity - Affection - Trust" during the Japanese leader's visit to Vietnam in April 2022. Photo: VNA
Among bilateral donors to Vietnam since 1995, Japan has always been the largest ODA partner. By the end of this year, the value of loans in yen is expected to exceed 100 billion yen for the first time since fiscal year 2017.
Mr. Kubo Yoshitomo, Deputy Chief Representative, Japan International Cooperation Agency (JICA) Office, said ODA capital focuses on transportation, energy, and urban infrastructure because they are three breakthrough areas in Vietnam's development strategy.
Those capital flows have been formed through 3,300 km of roads built (equivalent to 70% of high-standard two-lane roads in Vietnam), power plants with a total capacity of 4,500 MW (about 10% of national electricity output), or symbolic projects such as Nhat Tan Bridge, Binh Hung wastewater treatment plant, Metro Line 1...
Metro Line 1's second test run, from Suoi Tien Station to An Phu Station, April 26. Photo: Quynh Tran
In addition to the "hardware" in infrastructure construction, ODA capital also supports "software" such as human resource development; institutional and legal policy building. When Covid-19 broke out, Japan was the first country to provide vaccine aid to Vietnam.
Japan’s mark is not only reflected in ODA but also in FDI capital flows. As of September 20, Japan’s FDI in Vietnam reached 71.3 billion USD, ranking third out of 143 countries and territories investing in Vietnam, according to the Foreign Investment Agency.
One of the earliest companies to set foot in Vietnam was Acecook. In 1993, they made two promises: to develop Vietnam’s processed food industry and to export products that brought Vietnamese culture to the world.
"After 30 years, we have fulfilled this promise," Mr. Kajiwara Junichi, Chairman of the Board of Directors of Acecook, told VnExpress. Acecook currently owns 11 factories and 6 branches in Vietnam, creating jobs for more than 6,000 workers. The company also supplies more than 3 billion products to both domestic and export markets each year.
Mr. Takeo Nakajima, Chief Representative of the Japan External Trade Organization (JETRO) in Hanoi, said that Japanese investment in Vietnam began to accelerate with a significant capital injection into the Nghi Son oil refinery, approved by the Government in 2008. There are also a series of other large-scale projects, mainly in the fields of real estate, energy, manufacturing, and construction.
After the first enterprises coming to Vietnam such as Acecook, in 2008, Japanese capital was accelerated to flow into Vietnam. In December 2008, Vietnam and Japan signed the Vietnam-Japan Bilateral Economic Partnership Agreement (VJEPA), which is also Vietnam's first bilateral FTA, in which the two countries give each other more incentives than with the ASEAN-Japan Comprehensive Economic Partnership Agreement.
"During this period, the number of members of the Japan Chamber of Commerce and Industry in Vietnam continued to expand, exceeding 2,000 companies, the largest in ASEAN," said Mr. Takeo Nakajima.
During all three FDI booms in Vietnam, except for the period affected by the Asian currency crisis in 1998 and the bankruptcy of Lehman Brothers in 2008, the number of Japanese investment projects in Vietnam tended to increase, according to data from the Ministry of Planning and Investment.
Workers produce air conditioners at the Daikin factory in Vietnam in December 2019. Photo: Vien Thong
In terms of trade, because the goods are complementary and not directly competitive, Japan is considered a potential export market. Vietnam mainly exports seafood, crude oil, textiles, electric wires, electric cables, wood and wood products, computers and components, coal, and footwear.
During this year's Vietnamese Goods Week, supermarkets of the Japanese giant AEON featured southern products such as longan, mango, durian, and coconut honey. Many years ago, northern products were also on Japanese supermarket shelves. AEON Japan Deputy General Director Mitsuko Tsuchiya said that Vietnamese fruits are actually highly appreciated by the Japanese market, because most of them are grown in natural conditions. 10 tons of Long An longan and 200 tons of bananas have been exported through this retail chain. In the period 2017-2022, the total export value of Vietnamese products through AEON's retail system to Japan and other countries has reached more than 2 billion USD.
Meanwhile, Vietnam imports from Japan goods serving industrial production such as machinery, equipment, tools and spare parts, electronic products and components, iron and steel of all kinds, fabrics of all kinds, auto parts, raw plastics, chemicals, textile and footwear materials.
Vietnam becomes a major partner of Japan
"All the members of the company are Vietnamese, except me," Daisuke Mori, the 28-year-old boss of the Japanese startup, said in Cantonese-accented Vietnamese.
In Vietnam, even during the Covid-19 period, Daisuke Mori, 28 years old, saw a business opportunity that he said "didn't exist in Japan".
"The Vietnamese market, especially the Internet, is changing very quickly - something that doesn't happen in Japan because most industries already have complete infrastructure and structures," he said. Over the past few years, his company has provided advertising and marketing agency services for e-commerce platforms such as Shopee, Lazada and TikTok Shop as well as building and developing applications for clients' commercial websites. He admitted that it was not easy to adapt to changes like in Vietnam. "But I feel very excited when doing it," he said.
Other Japanese giants see more opportunities than Daisuke Mori. For Vietnam, the "attraction" for them to make investment decisions is the market size of 100 million people.
A representative of AEON - a retail giant that considers Vietnam one of its two most important markets - assessed that many Japanese businesses are attracted by the rapid population growth rate, especially the middle class in Vietnam. The GDP growth rate is much higher than other Asian countries, including Japan, which is an advantage for Vietnam. AEON has announced that it will continue to open many large shopping centers in the next 3-5 years in Vietnam.
Vietnam's populous market not only has great purchasing power but also provides an abundant source of labor for Japan. In recent years, this country has faced a serious aging population with the proportion of elderly people (aged 65 and over) accounting for more than 29% - the highest in the world. This pressure has forced many Japanese businesses to expand to countries with large scale, young populations, as well as increase labor imports.
According to the assessment of Deputy Ambassador of Japan to Vietnam Watanabe Shige, Vietnam's hard-working workforce has made great contributions to the economic and social development of their country. Vietnam leads the 15 countries sending trainees to work in Japan, according to the Department of Overseas Labor Management. A total of more than 345,000 Vietnamese workers are working and living in Japan in 84 industries, as of the end of 2022. Currently, the number of Vietnamese workers in Japan accounts for about a quarter of the total number of foreign workers in Japan.
Previously, most of the investment in Japan came from developed Western countries. But according to Takeo Nakajima, Chief Representative of the Japan External Trade Organization (JETRO) in Hanoi, recently, investment in Japan from Asian companies, including Vietnam, has been increasing.
Vietnamese enterprises investing in Japan are mainly in the field of information technology. The most significant investment, according to calculations from JETRO, is from FPT, a company with nearly 15,000 engineers working for Japanese customers; 2,900 employees are working directly at 16 offices and development centers in Japan.
This unit, which entered the Japanese market in the 2000s, aims to be in the top 20 largest technology service companies in Japan by 2025, with revenue of 1 billion USD by 2027.
After 50 years...
The relationship between the two countries is considered to be at its best ever, but according to Ambassador Nguyen Quoc Cuong, "that does not mean there is no momentum for further development."
In addition to traditional areas, according to him, it is possible to deepen the relationship, and there are new areas that require joint cooperation such as digital transformation, green economy, and climate change response.
"Previously, we mainly received help from Japan. Now, Vietnam's potential has enabled us to participate in the global supply chains that Japan needs," Ambassador Nguyen Quoc Cuong assessed.
According to a survey by JETRO, 34% of respondents said that "stable political and social situation" is an advantage of Vietnam's investment environment, second only to Singapore in ASEAN. Accordingly, the next 5-10 years will be an even more important period for Vietnam - Japan relations.
Mr. Tetsuya Nagaiwa, General Director of Muji Retail Vietnam (left) welcomes customers to shop on the occasion of the opening of a new store in Thu Duc City, Ho Chi Minh City in March 2023. Photo provided by the company.
Sharing the same view on "political stability", Mr. Tetsuya Nagaiwa, General Director of Muji Vietnam, added that the "plus point" for Vietnam's investment environment is the large population, open-minded people and willingness to accept new things.
However, he also noted that Vietnam needs to improve the quality of logistics infrastructure - a factor that helps businesses expand their business across the country. At the same time, the Japanese CEO who has lived in Vietnam for 4 years also suggested streamlining procedures and licensing processes to avoid a major impact on investor sentiment.
"If these two things are improved, I think Vietnam will attract more investors, not just from Japan," said Mr. Tetsuya Nagaiwa.
Phuong Anh - Telecommunications Graphics : Do Nam
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