Hanoi (VNA) – The COVID-19 pandemic has seriously affected Vietnam’s economy, but it is also thought to create conditions to attract more foreign direct investment (FDI) when there are signs of a switch in capital flows away from China and to ASEAN member countries.
The Lao dong (Labour) newspaper (quoted by Stephen Wyatt), Head of JLL Vietnam real estate consultancy, said that although the coronavirus epidemic has affected the whole world, Vietnam is still a promising destination. Many large enterprises are considering moving production out of China – a major supplier of materials to companies around the world but also where COVID-19 first broke out.
Recognizing such views, the General Director of the General Statistics Office Nguyen Bich Lam said that this is an opportunity to attract investors planning to curb production in China.
Investment promotion agencies should proactively work with foreign investors who have such plans and speed up the relevant procedures instead of waiting for the pandemic to end before doing so, he said.
Economic experts shared the view that now it is the right time for Vietnam to further strengthen its efforts to attract investment from the US, Canada and Europe to take advantage of agreements such as the Comprehensive and Progressive Agreement. Ministry for Trans-Pacific Partnership (CPTPP) and EU-Vietnam Free Trade Agreement (EVFTA).
Investment from these countries is often accompanied by tighter technology and standards, they point out, which will help Vietnam improve the quality of FDI.
Japan recently spent $ 2.2 billion to help its businesses shift production from China to Southeast Asian countries. The arrival of COVID-19 has also prompted European companies to consider establishing a safer supply chain.
This will create a great opportunity for businesses in Vietnam and elsewhere in ASEAN to join and enhance their position in the global value chain, the Lao Dong newspaper noted.
Rong Viet Securities Company (Viet Dragon) has forecast that new FDI into Vietnam will be mainly labor-intensive projects (textiles and wood and wood products), processing projects (food , paper, plastic and rubber, metal, and building materials), or global innovation projects (computers, mobile phones and electronic components).
It is also believed that whether Vietnam can take advantage of the given opportunities will depend on the approach of businesses and the Government’s supportive policies and guidelines.
Meanwhile, director of Vietnam economic consultancy Le Duy Binh said that, although Vietnam’s productivity has improved thanks to the young labor force, the country is still far behind its neighbors. qualification and discipline.
He suggested promoting public investment in infrastructure development while removing bottlenecks in air, sea, rail and road transportation to facilitate logistics and attract investment. It is also necessary to accelerate the settlement and transparency of tax and customs procedures.
Vietnam granted investment licenses for 758 new FDI projects with a total registered capital of 5.5 billion USD in the first quarter of 2020, an increase of nearly 45% over the previous year, according to the Foreign Investment Agency under the Ministry of Planning and Invest .
More than 230 existing projects have registered to add US $ 1.07 billion to existing capital in the quarter, equivalent to 82% of the figures in the same period last year. The value of capital contribution and share purchase of foreign investors reached nearly 2 billion USD, equivalent to 34.4% of the number in the same period in 2019.
Singapore topped the list of 87 countries and territories investing in Vietnam in the first three months of the year, with 4.54 billion USD, equivalent to 53.1% of the total. Followed by Japan (846.7 million USD) and China (815.6 million USD).