Attracting foreign investment waiting for breakthrough

To achieve the target of attracting 39-40 billion USD in foreign investment this year, we must rely on a breakthrough in the last months of the year.

The government expects to attract foreign investment this year to reach the same figure as last year, about 39-40 billion USD. Photo: D.T

Signs of slowing down

Attracting foreign investment remains a bright spot in the economy. This was once again confirmed when the Government reported to the National Assembly and when National Assembly deputies discussed the socio-economic situation in the hall. “Import-export and foreign direct investment have become prominent bright spots, reflecting the confidence of international investors in Vietnam’s investment environment,” said delegate Be Minh Duc (Cao Bang).

Not only in quantity, but also in quality, the emergence of large investment projects in the fields of semiconductors, energy (production of batteries, photovoltaic cells, silicon bars), production of components, electronic products, products with high added value, etc. is also highly appreciated by National Assembly delegates.

“It is forecasted that the total import-export turnover in 2024 will reach a record level of over 800 billion USD. This shows the recovery of domestic production and consumer demand in markets, in which exports from the foreign-invested sector account for a high proportion. Thus, enterprises in this sector are doing very well on the basis of preferential mechanisms and policies and support from the State, demonstrated by the fact that many large corporations have come to research and committed to invest in the fields of electronics, semiconductor chips, green energy, and renewable energy,” said delegate Trinh Lam Sinh (An Giang).

This is a fact. However, recent statistical reports on foreign investment attraction show that foreign investment in Vietnam is showing signs of slowing down. The Foreign Investment Agency (Ministry of Planning and Investment) said that in the first 10 months of 2024, registered foreign investment capital in Vietnam reached nearly 27.26 billion USD, of which newly registered capital reached nearly 12.23 billion USD; investment capital through capital contribution and share purchase reached more than 3.68 billion USD; adjusted capital reached nearly 8.35 billion USD.

It can be seen that although foreign investment in Vietnam is still on a positive trend, there are signs of slowing down. In the first 10 months of 2024, the total registered foreign investment in Vietnam increased by only 1.9%, down 9.7 percentage points compared to the increase in the first 9 months. In particular, new investment capital after a period of strong growth decreased by 2.5%; even the number of newly registered projects only increased slightly by 1.4% compared to the same period last year.

This is very noteworthy. And the reason pointed out by the Foreign Investment Agency is that the new investment projects in October 2024 are small in scale, with only a few projects having investment capital from over 100 million USD to over 300 million USD. Meanwhile, in October 2023, there were 3 projects with large investment capital from over 500 million USD to 1.5 billion USD.

Although these are only initial signs, signs of a slowdown in foreign investment attraction have appeared. The absence of large-scale projects is also noteworthy. It is very likely that these will affect the target of attracting foreign investment this year.

The Government, when reporting to the National Assembly, said that it expected that this year, foreign investment attraction would reach the same figure as last year, that is, about 39-40 billion USD. However, after 10 months, the figure has only reached nearly 27.26 billion USD, still more than 10 billion USD away from the target. To "fill" this gap requires no small effort.

After the past 10 months, the country has attracted nearly 27.26 billion USD in foreign investment capital, more than 10 billion USD away from the target set for 2024. Photo: Duc Thanh. Graphics: Dan Nguyen

Waiting for a breakthrough

Although foreign investment in Vietnam has begun to show signs of slowing down, there are still great opportunities and expectations ahead, especially when a number of large-scale investment projects, such as Samsung's project, are waiting for investment registration certificates. At the same time, opportunities to attract investment in the high-tech sector, including the semiconductor industry, are opening up.

Speaking at the opening ceremony of the Vietnam Semiconductor Industry Exhibition 2024 yesterday (November 7), Mr. KC Ang, Chairman of SEMI Southeast Asia Advisory Council, President of Global Foundries Asia region once again affirmed: "Vietnam has many opportunities to contribute to the semiconductor industry supply chain".

Although foreign investment in Vietnam has begun to show signs of slowing down, there are still great opportunities and expectations ahead, especially when a number of large-scale investment projects, such as Samsung's project, are waiting to be granted investment registration certificates.

In response, Minister of Planning and Investment Nguyen Chi Dung, Deputy Head of the National Steering Committee for Semiconductor Industry Development, emphasized Vietnam's determination to attract investment and develop the semiconductor industry in particular and the high-tech industry in general.

According to the Minister, to promote investment attraction in this field, Vietnam has been building an attractive business environment with many incentives for high-tech enterprises, including the application of special investment procedures. These policies are expected to be approved by the National Assembly at the 8th Session.

Along with that, according to Minister Nguyen Chi Dung, the Government will issue a Decree on the establishment, management and use of the Investment Support Fund to directly support businesses in this field in training, human resource development, investment in creating fixed assets, manufacturing high-tech products, etc., thereby contributing to improving Vietnam's position on the global semiconductor industry map.

Currently, many investors are also waiting for Vietnam to pass these policies so that they can make new investment decisions. When the policies are issued and necessary to be issued in 2024, there will be more large-scale projects pouring into Vietnam.

During the discussion at the National Assembly, delegates also emphasized the need to improve the investment and business environment, train high-quality human resources, as well as prepare land and energy factors for large-scale projects. “It is necessary to promote the reduction and simplification of administrative procedures and business regulations,” said delegate Nguyen Thanh Nam (Phu Tho).

Mr. Nguyen Thanh Nam gave an example of the implementation of two key projects on the construction and business of infrastructure for industrial parks in Ha Hoa and Tam Nong districts in Phu Tho. Although according to regulations, the total time for handling procedures for approving investment policies should not exceed 3 months, and the time for collecting opinions from relevant state agencies on appraisal contents should not exceed 15 days, for the past 4-5 years, the investment procedures for these two projects have not been completely processed.

"Investors are still waiting, leading to missed investment opportunities. They have to think about the long road ahead and the future is scary," said delegate Nguyen Thanh Nam.

To create a breakthrough in attracting investment, especially in high-tech fields, including semiconductors and AI, this is clearly something that needs to be improved quickly.

Source: https://baodautu.vn/thu-hut-du-tu-nuoc-ngoai-cho-dot-pha-d229442.html