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Weak Support Industries Discourage Japanese FDI (23/3)
23/03/2012 - 19 Lượt xem
At a workshop held by the Foreign Investment Agency under the Ministry of Planning and Investment in Hanoi
in December 2011, Sotaro Nishikawa, the director of the Japan External
Trade Relations Organization (JETRO) in Hanoi, said that annually,
JETRO is consulted by 500 Japanese investors who want to learn more
about the Vietnamese investment market.
In
2011, The Nikkei (Japan Economic Times) surveyed nearly 350 large
Japanese companies and 60 percent of the surveyed companies said they
considered Vietnam an attractive destination.
However, in 2010, Vietnam attracted just over US$2 billion in foreign direct investment (FDI) from Japan, with the country ranked fourth among 55 countries and territories investing in Vietnam. Japanese FDI investment in Thailand by contrast, stood at US$3.3 billion in 2010.
In 2011, despite a range of investment promotion activities in Vietnam and Japan, Vietnam attracted just US$2.43 billion of Japanese FDI, accounting for only 16.6 percent of the total amount of FDI flowing into Vietnam last
year. Experts said the result was modest given circumstances where the
Japanese Government was striving to rebuild the country after the
earthquake and tsunami in March 2011 and encouraging domestic companies
to invest overseas, directing their attention to Asian countries,
including Vietnam.
What hinders Japanese investment in Vietnam?
Japanese investors have provided different reasons behind their hesitancy when deciding whether to invest in Vietnam.
At a meeting with Vietnamese Planning and Investment Minister Bui Quang Vinh on March 5, 2012, Japanese investors from Nippon
Keidanren (Japan Business Federation) said that the lack of qualified
human resources, poor infrastructure, insufficient power supply and
particularly underdeveloped support industries were factors which left
Japanese businesses unwilling to invest in Vietnam.
Regarding support industries, Sotaro Nishikawa said that Japanese businesses operating in Vietnam complained that they had to import 70 percent of their components and spare parts and so their expenditure in Vietnam was unnecessarily high.
Vietnam Chamber
of Commerce and Industry (VCCI) Chairman Vu Tien Loc said that weak
support industries not only reduced the added value of export products,
but also left foreign businesses unwilling to invest in Vietnam.
Building and developing support industries has become one of the important goals of the Vietnam-Japan Joint Initiative, which will help increase the competitiveness of the Vietnamese economy in the eyes of foreign investors, said Planning and Investment Minister Bui Quang Vinh.
Aware
of the important role of support industries for FDI attraction efforts
and the industrialization of the whole country, in February 2011, Prime
Minister Nguyen Tan Dung promulgated Decision 12/2011/QD-TTg. The
decision proposes measures to promote support industries in areas such
as engineering, electronics, information technology, auto manufacturing
and assembly, textiles and garments, leather and footwear, and high
technology. Land-related preferences will be offered to those who
invest in manufacturing support industry-related products./.
Source: VEN.
Source: VEN.
