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| Quality investment capital flows into Vietnam increase sharply. (Source: Vietnamnet) |
New billion dollar cash flow
Ha Tinh Newspaper reported that on September 28, Ms. Antonia Zahn Weber, CEO of VFT Industry UG Company of Germany, had a meeting with a high-ranking delegation of Ha Tinh province about the construction of a stainless steel factory in Vung Ang Economic Zone.
Accordingly, VFT Industry UG plans to build a stainless steel factory on an area of 250 hectares, with a total investment of 1.5 billion Euros. The steel production capacity is estimated at 1.1 million tons/year.
Ms. Antonia Zahn Weber said that Ha Tinh has many advantages such as convenient transportation, abundant human resources, 137km long coastline, the largest deep-water port in Vietnam, Vung Ang - Son Duong (can receive ships of over 300,000 tons)... In particular, Ha Tinh is increasingly attracting the attention and investment of many large corporations and projects in the world.
This is the next signal of capital flow from the European Union (EU) into Vietnam. Previously, in November 2022, the Danish LEGO Group broke ground on a project to build a factory worth over a billion USD at the Vietnam - Singapore Industrial Park III in Tan Uyen, Binh Duong province. This is the first large-scale project invested by the LEGO Group in Vietnam, the 6th factory worldwide and the 2nd in Asia.
LEGO's factory in Binh Duong has been disbursed very quickly and is preparing personnel and labor to go into production in the second half of 2024.
The opportunity to welcome European-American capital flows is becoming increasingly clear, especially after Vietnam and the US upgraded their cooperative relationship to a comprehensive strategic level. The trade, currency, and technology wars between major powers, the Russia-Ukraine conflict, and the EU-Vietnam Free Trade Agreement (EUVFTA) are driving forces for large corporations to diversify their supply chains.
Intel USA said that the group invested an additional 475 million USD in its factory in Vietnam at the end of last year, bringing the total investment to 1.5 billion USD. So far, Intel Products Vietnam is the largest of the four factories in the assembly and testing sector. Currently, the factory in Vietnam produces a number of microprocessors and performs more than 50% of the global production in assembly and testing. The US group is also and will continue to invest in Vietnam.
Meanwhile, the US Apple Corporation has completed moving 11 factories producing audio-visual equipment to Vietnam.
In late March 2023, an unprecedentedly large American business delegation arrived in Vietnam. There were representatives of 52 American companies and corporations, including defense, pharmaceutical, technology companies... (such as Boeing, Bell, UPS...) to discuss investment and business opportunities.
Many familiar corporations are operating or manufacturing in Vietnam and have expansion plans such as Apple, Intel, Coca-Cola and PepsiCo, Netflix...
SpaceX is also looking for satellite Internet service markets in Vietnam and other countries in the region. Pfizer and Johnson & Johnson, medical device manufacturer Abbott, energy company AES, Visa Financial Company, Citibank, cloud computing technology companies Meta and Amazon Web Services, Google, Walmart… are actively seeking business opportunities in Vietnam.
Great opportunity for Vietnam
If 10 years ago, money from Japan, Korea, Singapore, China... poured into Vietnam, then in the new decade, large capital flows may come from Europe and the US. Vietnam's export value of 1,000 billion USD has also been mentioned.
Japan and Korea alone have so far poured more than 150 billion USD into Vietnam. FDI from the US and Europe could be much larger in the future.
In addition, capital flows in the financial market will also be very active when the stock market is upgraded, possibly in 2024. The new KRX trading system (based on Korean technology) with larger capacity and more products will be put into operation from the end of 2023. Instead of deals worth a few hundred million, there may be a few billion USD in domestic enterprises.
In a recent report by VinaCapital, the event of Vietnam and the US issuing a joint statement upgrading their relationship to a Comprehensive Strategic Partnership (CPS) after US President Joe Biden's official visit to Vietnam from September 10-11 marked a historic milestone for bilateral diplomatic relations between the two countries.
Accordingly, the CPS creates a framework for further cooperation and collaboration between Vietnam and the US in many fields, including economics, trade, science, investment, technology, digital, education, energy, etc.
In fact, the trend of shifting global supply chains has been strong in recent years. Not only Intel, Apple... but many other American and European corporations have also sought and expanded their supplier networks and developed production facilities in many new regions, including India, Indonesia, and Vietnam.
Along with the "eagles", many other corporations also tend to move, such as Foxconn, Pegatron...
As for the EU, for many years, the economies of these countries have been heavily dependent on Russia and China, from gas and energy to raw materials and product markets. The recent vulnerability of European countries to heightened geopolitical tensions may cause the EU to make longer-term calculations for the future.
Recently, leading experts around the world have said that geopolitical tensions are now the number one enemy of the global economy, not protectionism. Professor of International Political Economy at Harvard Kennedy School Dani Rodrik also made such a comment on Project Syndicate.
Geopolitics has recently been considered one of the most important factors that can lead to a market crash, or a capital flow reversal, as well as financial and liquidity crises…
Capital flows from the US and EU may flow into some emerging economies. Capital flows from Japan, Korea, etc. will also continue to find safe havens.
With the EU, Vietnam has the EVFTA free trade agreement, along with the Vietnam-US CPS, which will be a driving force to help EU corporations accelerate investment shifts to Vietnam to take advantage of tax incentives and easily export to the US.
In a recent report by HSBC, the organization said that despite the bleak short-term outlook for trade, ASEAN continues to attract FDI, reaching a record global market share of nearly 17%.
According to HSBC, many investments have been poured into the region’s growing technology and electric vehicle supply chains as well as financial activities. Even Chinese investors are increasing their FDI in ASEAN’s diversified manufacturing and sub-sectors. Vietnam, meanwhile, is a bright spot in the region.
According to the General Statistics Office, foreign direct investment in Vietnam in the first 9 months of 2023 is estimated at 15.91 billion USD, up 2.2% over the same period last year - the highest level in 9 months of the years from 2019 to present. Registered capital reached more than 202 billion USD, up 7.7% over the same period last year.
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