Vietnam represents bright spot in FDI attraction25/05/2022 28
Vietnam remains a bright spot in terms of foreign direct investment (FDI) attraction, despite the negative impacts of geopolitical factors globally and the COVID-19 pandemic, according to insiders.
Experts made this assessment at the Vietnam Industrial Property Forum 2022 which is being co-organised by Dau Tu (Investment) newspaper and the BW Industrial JSC on May 24.
At the event, Deputy Minister of Planning and Investment Tran Duy Dong emphasised that although the pandemic has disrupted the global supply chain and the flow of goods, investors from Asia, Europe, the US, and ASEAN have continued injecting money into the Vietnamese market.
Last year saw FDI inflows into the country surge by 9.2% to US$31.15 billion compared to 2020, while financers also injected US$10.8 billion into the nation during the four-month period, with the additional investment capital soaring by 92% to reach US$5.29 billion against the same period from last year.
These positive figures have highlighted investors' confidence in the business climate and the Government’s policies regarding economic recovery moving into the post-COVID-19 period.
Deputy Minister Dong pointed out that Vietnam is becoming an attractive destination for foreign investors, proving the Government’s effective solutions for COVID-19 containment in order to restore production activities and reboot the local economy.
Furthermore, these positive signs can also be attributed to rapid vaccination coverage and the Government’s bailout packages for socio-economic recovery and development, he noted.
Through consistent political stability and the Government's determination to carry out these drastic measures, Vietnamese GDP in the first quarter of the year grew by 5.03% on-year, higher than last year’s growth rate of 4.7%.
Most notably, the country’s total trade turnover throughout the reviewed period edged up 15.9% to reach US$242.43 billion, of which FDI-invested firms continued making significant contributions, with import and export value increasing by 14.9% to US$168.37 billion.
Experts analyzed that new-generation free trade agreements (FTAs) such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA) have become a driving force behind economic growth, as well as the country’s international trade activities in the post-pandemic period.
Ramping up export activities amid global rising demand for goods will therefore further affirm the country’s position as an attractive destination for manufacturers as more local firms are getting involved in the global supply chain, they stressed.
Economists underlined the necessity of developing service industries in an in-depth manner, improving the quality of the infrastructure at industrial parks, training high-quality human resources, and devising additional policies for the development of the supporting industry in order to attract high-quality FDI inflows in the future.
Think tanks also underscored the importance of e-commerce development in pushing up the demand for warehouse real estate and logistics services, assessing that there should be further policies and mechanisms for the logistics and warehousing industry as it becomes a crucial part in the industrial property sector.
Deputy Minister Dong also pointed out that Vietnam has been preparing for a new wave of investment and aiming to become an important global production base by revamping the legal system and improving the local investment climate to prioritise FDI projects that employ modern and ecotechnologies.
- US Exempts Tariffs on Vietnamese Solar Panels for 2 Years: What to Expect
- Australian trade minister offers ‘compromise’ with China over anti-dumping tariffs
- Textiles and garments face many challenges in major import markets
- Supply chains are more resilient than they appear
- Google ponders moving smartphone production from China to Vietnam