Vietnam: Attracting more FDI from Japan

[Ulhas Joglekar <joglekarulhas@xxxxxxxx>]

News Online - Vietnam Economic Times
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Ext.economic relations

Attracting more FDI from Japan
http://www.vneconomy.com.vn/eng/index.php?param=article&catid=07&id=20f77ac491c8f6

VNECONOMY updated: 30/03/2006

Japan has been among top 5 countries with FDI in Vietnam for years. In 2005,
new FDI projects in Vietnam totaled $440 million, doubling in 2004. Japanese
firms also injected additional $600 million in their existing projects,
confirming their confidence in business potentials and opportunities in
Vietnam.

Among Japanese firms doing business in Vietnam, there are several giants
like Canon, Honda, Toyota, Sony, etc. There are also smaller firms such as
Tohohoku Pioneer. Mr. Kyoshiro Ichikawa, senior investment consultant from
Japan International Cooperation Agency (JICA) said Tohohoku Pioneer coming
to Vietnam signals a new trend: Japanese local firms have begun paying
attention to Vietnam. In a meeting calling for investment from Japan into
Vietnam organized in Tokyo, 600 investors joined in. Among those, many are
from localities.

Japanese investors are able to organize their business plan very well. They
prefer 2 investment models namely joint venture and 100% foreign capital
firms. If products are sold in the Vietnam market, Japanese firms will
establish joint ventures but if products are exported, they will choose to
set up 100% foreign capital firms. The fields that lure a large number of
Japanese investors in Vietnam are mechanical manufacture, heavy industry and
transport service because these are their strengths.

According to Mr. Ichikawa, Japanese investors like to do business in the
Northern region than the Southern part of Vietnam. The amount of Japanese
FDI capital in the North is 4 folds as much as in the South. The reason is
shortage of land and high labour wages in the Southern part.

He suggested Vietnam should attract Japan's FDI in mechanic manufacture and
IT. Investors in subsidiary industries will follow those in these fields,
resulting in a larger amount of FDI capital. In particular, for IT, which is
encouraged much by the Vietnamese Government, FDI from Japan, a country with
developed IT industry, will help improving competitiveness for Vietnamese
businesses, employers and national IT industry.

To attract Japanese investors in these fields, Vietnam should do more to
train human resource. Japanese local investors are eyeing Vietnam and this
is really a good chance for localities in Vietnam.

Source: Th?i báo Kinh t? Vi?t Nam

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