 |
| How many "eagles" want to choose Vietnam as their second homeland and what must be done to make Vietnam the chosen country? (Source: VNA) |
Bright colored pieces
From a major concern at the beginning of the year, attracting foreign investment, it can be said, has unexpectedly become a bright spot in the economic picture of 2023. At the end of December 2023, since the Foreign Investment Agency (Ministry of Planning and Investment) announced that in 2023, there was 36.61 billion USD of foreign investment capital registered in Vietnam, while disbursed capital reached a record of nearly 23.2 billion USD, this has been mentioned a lot.
On the morning of December 29, 2023, when the General Statistics Office held a press conference on the socio-economic situation in 2023, attracting foreign investment also became a major concern, although in reality, this question has rarely been mentioned at such meetings. But that is understandable, because the figure of 36.61 billion USD, up 32.1% over the same period in 2022, is impressive. Notably, of this, newly registered capital reached nearly 20.2 billion USD, up 62.2% over the same period. Meanwhile, investment capital through capital contribution and share purchase reached more than 8.5 billion USD, up 65.7%. All impressive growth rates.
In fact, from the beginning of 2023, when talking to reporters of Dau Tu Newspaper, Mr. Do Van Su, Deputy Director of the Foreign Investment Department, predicted that foreign investment attraction in 2023 could reach 36-38 billion USD, while disbursed capital would be about 22-23 billion USD. One of the reasons is that China's opening of its economy will have a positive impact on attracting foreign investment in Vietnam.
“In the region, China is still the leading investment destination, so when they open up, capital will flow into this market, limiting to Vietnam and other economies. But on the contrary, the shift of investment capital from Korea, Japan, Taiwan, etc. out of China will be accelerated. This shift will be accelerated until 2025,” said Mr. Do Van Su.
But perhaps, until the last days of 2023, especially in the first half of the year, few people believe that number can be achieved. Because, after 6 months, the new figure is 13.43 billion USD in registered capital, down 4.3% compared to the same period in 2022. Only when LG Innotek's project to increase capital by more than 1 billion USD in Hai Phong was recorded, did foreign investment in Vietnam "reverse". After 7 months, the figure is nearly 16.24 billion USD, up 4.5% compared to the same period in 2022.
Since then, the trend has been increasingly positive, especially as large-scale projects continue to be invested in. From the JINKO Solar Hai Ha Photovoltaic Cell Technology Complex Project, with an investment capital of 1.5 billion USD; to the Lite-ON Project of 690 million USD in Quang Ninh; then SK's 500 million USD Project in Hai Phong; the Sumitomo Mitsui Banking Corporation's deal to spend 1.5 billion USD to buy shares of VPBank and most recently the nearly 2 billion USD Power Project in Thai Binh... All of these bring bright pieces to the economic picture of 2023.
“Vietnam continues to be a safe and attractive destination for investors,” said Mr. Do Nhat Hoang, Director of the Foreign Investment Agency.
Vietnam clearly continues to have great success in attracting foreign investment, after more than 35 years of effort.
Second home
The numbers, especially the record disbursement of capital, bring great excitement. But perhaps, that excitement comes more from state management agencies and policy makers.
Investors and businesses, both domestic and foreign, are probably more excited about the high-level visits to Vietnam by US President Joe Biden, General Secretary and President of China Xi Jinping, President of South Korea Yoon Suk Yeol, etc.; and the foreign trips of the country's leaders. Because along with that, investment and business cooperation opportunities are opened up, wider than ever.
Just during President Joe Biden’s visit, when the two countries decided to focus their cooperation on innovation, science and technology, including semiconductors and AI, billion-dollar opportunities were established. A series of big names, such as Intel, Qualcomm, Ampere, ARM, Synopsys, Infineon, Marvell… continued to seek out, to initiate strategic cooperation opportunities.
Han Micron also inaugurated a new factory, with a scale of 600 million USD and will increase to 1 billion USD in the coming years. Amkor has put into operation the first phase of the 1.6 billion USD factory. Sysnosys, Marvell, Nvidia… are also studying new cooperation possibilities in Vietnam.
“We see incredible opportunities for Vietnam to grow its footprint in the global semiconductor supply chain,” said John Neuffer, President of the Semiconductor Industry Association.
But that “incredible” opportunity does not only come to the semiconductor industry in particular, but also to the high-tech industry in general. Therefore, a series of investment and production expansion plans in Vietnam by Foxconn, Compal, Goertek, Luxshare, Samsung, LG… have been and are being implemented.
Mr. John Neuffer mentioned the “sublimation” of the semiconductor market in 2023, after the difficulties during the Covid-19 pandemic have passed. Vietnam also seems to be “sublimating” in attracting foreign investment.
Immediately after the visit to Vietnam by the American Semiconductor Association delegation, billionaire Jensen Huang, Chairman and CEO of Nvidia Corporation, came to Vietnam. This visit immediately caused a big stir in the technology community and global investors. Because Jensen Huang is the "wizard" of the global AI industry. Moreover, Nvidia's development is amazing, its capitalization reached the milestone of 1,000 billion USD at the end of May 2023.
“We are committed to making every effort to make Vietnam Nvidia’s second home. We will establish a legal entity in Vietnam,” said Mr. Jensen Huang during his visit to Vietnam.
And this has created great excitement and inspiration for investors. Although Mr. Jensen Huang’s statement has not yet come true, the question is, how many more “eagles” want to make Vietnam their second home?
This number is actually not small. For many years, Samsung has considered Vietnam as its second home and that is the reason why this investor has poured 20 billion USD into the Vietnamese market, making Vietnam not only an investment base, but also an R&D base.
“We will contribute to building our second homeland by making efforts for the development of Vietnam, for example, supporting the development of the supporting industry in Vietnam,” said Mr. Choi Joo Ho, General Director of Samsung Vietnam, adding that the philosophy of “co-prosperity” has always been an effort of Samsung since the first days of coming to Vietnam.
Although not affirming that Vietnam is a “second home”, Mr. Furusawa Yasuyuki, Member of the Board of Directors of AEON Group (Japan) in charge of the Vietnamese market, and General Director of AEON Vietnam, said that for AEON, Vietnam is the “second most important market” besides Japan. Therefore, AEON is still accelerating its investment, recently signing a cooperation agreement to open large shopping centers in Can Tho and Bac Giang. The investment capital for these two centers could be up to 500 million USD.
Meanwhile, Foxconn, Goertek…, or Intel all consider Vietnam as one of the most important production bases. They continue to invest in the potential market of Vietnam.
Pulling "eagles" to build houses
In late 2023, Intel decided to invest in Israel in a project worth up to $25 billion. Although this information had been rumored before, the $25 billion figure surprised observers. Reuters reported that to receive this project, the Israeli government agreed to grant Intel a grant of up to $3.2 billion, equal to 12.8% of the total investment capital of the project.
This story is similar to the previous one, both Poland and Germany have made significant support commitments to receive large projects from Intel. In Poland, it is 4.6 billion USD, and in Germany, it is 30 billion EUR (33 billion USD). Meanwhile, there is information that Intel has canceled the investment plan for phase II in Vietnam.
Although the information has not been confirmed, this shows that competition to attract investment is becoming increasingly fierce. Vietnam's "competitors" will not only be regional economies such as Thailand, Malaysia, India and even China, but also possibly further afield.
In its latest report, the Macroeconomic Management Task Force 1317 stated that although a new wave of investment is expected to open up for Vietnam, especially after the cooperation commitments of US partners and although Vietnam is still one of the priorities chosen, the challenges are not small. Because it is forecasted that in 2024, the global foreign investment outlook may be more uncertain, affecting the trend of capital movement, including the trend of "repatriation", shifting production closer to and to close allied countries.
In addition, according to the Macroeconomic Management Task Force 1317, from January 1, 2024, Vietnam will also join the global minimum tax “playground”. Therefore, the Government needs to soon issue policies to attract and retain investors, as well as support businesses to take advantage of new opportunities from the shift in production supply chains, attracting more multinational corporations to invest in new fields such as semiconductor chips, AI, etc.
The Ministry of Planning and Investment is drafting a Decree on the establishment, management and use of the Investment Support Fund, with the aim of attracting and retaining eagles, especially in the high-tech sector. “Recently, the National Assembly issued a Resolution allowing the Government to develop a Decree to establish an Investment Support Fund for a number of high-tech projects, including semiconductor projects. We are actively developing and will soon issue it in mid-2024,” said Minister of Planning and Investment Nguyen Chi Dung.
But along with preferential mechanisms, what investors need is readiness in terms of land, infrastructure, human resources, and stronger reforms of administrative procedures, investment environment, as well as the development of supporting industries, and even the growth of the domestic business sector, to be able to become their partners in the global game.
(according to Investment Newspaper)
Source
Comment (0)