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| Investment trends in Vietnam have recently become more positive and are gradually recovering, after the impacts of the Covid-19 pandemic and global political and economic fluctuations. (Source: Investment Newspaper) |
A few days ago, Binh Thuan held a ceremony to introduce investors and hand over investment decisions for the Son My LNG - electricity project chain. This was the beginning of the investment implementation of 4 large-scale projects, including the Son My LNG Import Port Project; the Son My Power Center Project; the Son My Power Center Connection Project to the National Power System and the Son My - Phu My Gas Pipeline Project.
Waiting for the "eagles"
Among the investors participating in this project chain, in addition to PetroVietnam Gas Corporation (PVGas) and Vietnam’s Pacific Group, there are also a number of foreign investors, including AES (USA), EDF (France), Kyushu and Sojitz (Japan). Of which, AES and Sojitz are two investors who have implemented billion-dollar projects in Vietnam. And now, there will continue to be investments of up to billions of dollars.
According to the plan, the Son My Power Center, including the Son My 1 and Son My 2 plants, will have an investment capital of up to 4 billion USD. Meanwhile, the Son My Port Warehouse Project has an estimated investment capital of nearly 1.34 billion USD…
It will not be easy to put these projects into implementation soon, but at least, there are “giant” projects and “eagles” waiting to enter Vietnam, aiming to turn Son My into a new center of gas and electricity projects, thereby contributing to the energy transition and economic growth of Vietnam.
Meanwhile, Bac Ninh Provincial Party Secretary Nguyen Anh Tuan recently had a working session with Mr. Chen Tao, Chairman of Victory Gaint Technology Group (China). As a leading enterprise specializing in the production and trading of electronic components and semiconductors in China, Victory Gaint Technology is planning to invest in a factory in Bac Ninh.
And not just planning, Mr. Chen Tao said, after a period of research, the Group decided to choose VSIP Bac Ninh to build a factory with a scale of 400 million USD. It is expected that when put into operation, the annual production value will reach about 1 billion USD.
Thus, after the Amkor Group’s project of over 1.6 billion USD, expected to come into operation at the end of this year, Bac Ninh is about to welcome another large-scale project in the field of semiconductor components. These are all meaningful projects, as Vietnam is looking to attract more large-scale projects in high-tech fields, especially the semiconductor industry.
Recent information shows that localities are also very active in promoting and calling for foreign investment. Nghe An is one of the typical examples. Recently, the provincial leaders awarded an investment certificate to Innovation Precision Vietnam Co., Ltd. (China). With a total investment of 165 million USD, the project will produce aluminum alloys for the consumer electronics and green energy industries, etc. and is expected to be operational from October 2024.
Investment flows still flow
The investment trend in Vietnam has recently become more positive and gradually recovered, after the impacts of Covid-19 and global political and economic fluctuations. Reporting at the recent regular Government meeting, Minister of Planning and Investment Nguyen Chi Dung emphasized this.
According to the Minister, registered foreign direct investment (FDI) capital in July 2023 reached over 2.8 billion USD, an increase of nearly 9% over the previous month; the total for 7 months reached nearly 16.24 billion USD, an increase of 4.5% over the same period; realized capital for 7 months reached about 11.58 billion USD, an increase of 0.8% over the same period.
The figures may be more positive in August and the first eight months, when new investment projects are recorded, including a 165 million USD project in Nghe An. Commenting on the situation of attracting foreign investment in the coming time, Mr. Do Nhat Hoang, Director of the Foreign Investment Department (Ministry of Planning and Investment) said that it will be "more prosperous".
However, it is not without difficulties and challenges. In early July 2023, when announcing the Business Confidence Index (BCI) for the second quarter, the European Chamber of Commerce in Vietnam (EuroCham) on the one hand continued to affirm the attractiveness of Vietnam as a destination, but on the other hand also pointed out the problems that European investors in Vietnam are facing.
These include power shortages, “inadequate” infrastructure, and barriers related to unclear regulations and cumbersome administrative procedures. Not to mention concerns related to the upcoming implementation of a global minimum tax.
One notable point in the EuroCham report is that the shift of manufacturing activities from China to Vietnam has been slower, with a significant gap between plans and reality, with the majority of companies not yet shifting any production activities. Once the shift slows down, competition for foreign investment will become increasingly fierce, and without timely policy responses, Vietnam will be left behind.
Regarding this issue, Minister Nguyen Chi Dung said that Vietnam will continue to improve breakthrough mechanisms and policies on incentives and support for non-tax investment in the context of applying global minimum tax, creating competitive advantages to attract large-scale, high-tech foreign investment projects with deep and wide spillover effects, contributing greatly to socio-economic development.
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