Nearly 25 billion USD of foreign direct investment (FDI) capital has been committed to Vietnam since the beginning of the year, of which about 14 billion USD has been disbursed, showing optimistic signs of the recovery prospects of foreign capital flows, contributing significantly to Vietnam's economic growth.
The structure of FDI capital invested in production has shifted positively with the increasing trend of investment projects in high-tech fields with the participation of many large corporations and companies in the world.
Reliable investment environment
Hyosung Group (Korea) recently announced a plan to invest an additional 4 billion USD, doubling the total capital that this enterprise is investing in Vietnam. Chairman of Hyosung Group, Mr. Cho Hyun-joon, commented that Vietnam's investment environment is reliable, believing that Vietnam will become the manufacturing center of Asia. The continued expansion of the investment scale shows that Hyosung is fulfilling its commitment to place the future of the next 100 years in Vietnam as promised before. Currently, Hyosung is the third largest FDI partner of Korea in Vietnam, after Samsung and LG. In the coming time, this group is expected to expand investment in projects in the fields of data centers, production of high-tech industrial materials, sustainable biofuel plants, and carbon fibers.
Notably, Hyosung also plans to invite the Abu Dhabi National Oil Corporation (ADNOC) of the United Arab Emirates (UAE) to be its investment partner in Vietnam and expects this to be a new business cooperation model between Vietnam, Korea, and the UAE. In particular, Hyosung will play a connecting role in attracting investment from the Middle East to Vietnam.
In the first nine months of 2024, Vietnam attracted more than 24.7 billion USD of FDI capital, an increase of 11.6% over the same period in 2023. In September alone, total FDI capital in Vietnam reached nearly 4.26 billion USD, an increase of 8.9% and accounting for 17.2% of total investment capital in the nine months, the highest level since the beginning of the year. Additional investment capital also reached the highest level with projects expanding capital on a large scale. According to Savills Vietnam's assessment, the structure of FDI capital invested in manufacturing has shifted positively with an increasing trend of investment projects in high-tech fields such as electronics, component manufacturing instead of focusing on traditional industries such as textiles, wood, etc.
Minister of Planning and Investment Nguyen Chi Dung said that Vietnam has formed a large-scale semiconductor and artificial intelligence ecosystem in the region, with the participation of many large corporations such as Google, Meta, Qualcomm, Intel, Nvidia, AMD... and many high-tech enterprises in the electronics industry.
Vietnam has all the necessary conditions to develop the semiconductor and AI industries. We have a stable political system, high political determination, especially a large, enthusiastic young workforce with the ability to access science and technology, especially in STEM fields. Human resources are Vietnam's biggest advantage today.
Select priority areas
Vietnam’s fastest GDP growth in ASEAN is due to its openness to FDI, HSBC’s chief economist for Asia-Pacific, Frederic Neumann, has recommended that Vietnam maintain its openness to foreign investment to continue to stand out from other countries. Vietnam’s active participation in free trade agreements has brought many trade benefits, creating an advantage in the competition to attract FDI among countries in the region, and could increase its attractiveness if labor issues, electricity connectivity and logistics infrastructure are improved.
Recently, Vietnam has received the attention of FDI investors in many new and high-tech industries. Earlier this year, the Ministry of Planning and Investment expected that by 2024, the total registered FDI capital in Vietnam would reach about 39-40 billion USD, focusing on attracting large-scale, high-tech FDI projects in the processing, manufacturing, electronics, semiconductor, hydrogen industries, etc. This trend is consistent with Vietnam's FDI attraction orientation in the country's new development stage.
In its Q3/2024 update report, HSBC Bank stated that Vietnam continues to attract foreign capital flows as fundamentals remain positive. Although newly registered FDI growth declined in Q3/2024, sectors such as real estate and energy witnessed increased investment. In the future, capital flows into manufacturing are likely to remain stable as Vietnam's efforts to strengthen relations with international partners will create favorable conditions to attract more investment.
According to Professor, Doctor of Science Nguyen Mai, Vietnam has enjoyed a stable FDI inflow that is among the highest in ASEAN (as a percentage of GDP). Competitive costs and a favorable investment environment play a key role in attracting foreign businesses. However, in the context of increasingly intense global competition to attract FDI, along with developments such as the implementation of global minimum taxes, adapting to the global investment environment has become more complicated. To overcome challenges and take advantage of opportunities to attract more and more high-quality and economically efficient FDI projects, faster innovation in thinking and action is very important, focusing on three factors: institutional improvement, infrastructure modernization and state management innovation.
The largest investment partners in the first nine months of 2024 are all traditional partners of Vietnam and come from Asia. Of which, the top 5 countries/territories, including Singapore, China, South Korea, Hong Kong (China), and Japan, accounted for 73.2% of new investment projects and 75.2% of the total registered investment capital of the country. Regarding the FDI capital structure, 63.1% of investment capital was poured into the processing and manufacturing industry; 17.7% into real estate business activities; 4.5% into electricity and water production and distribution; 3.4% into professional, scientific and technological activities, etc. Source: Foreign Investment Agency (Ministry of Planning and Investment) |
Source
Comment (0)