Vietnam is having opportunities to lure more foreign investment as it is predicted there would be a larger shift in investment from China to other countries, especially after the Covid-19 epidemic.
As China has been hit hard by the new coronavirus, global experts have raised concerns over the world’s over-reliance on China, and forecast major companies will look to move their operations from China in order to diversify and protect their interests.
| Investment procedures should be further facilitated to attract foreign investors. |
According to the Vietnamese National Center for Socio-Economic Information and Forecast, investors will have to reassess production and investment plans to avoid risks and the rearrangement of global production chains will be an opportunity for Vietnam to lure a large number of foreign businesses and investments.
If Vietnam continues to contain the disease outbreak at its current level or better, the country will be poised to take advantage of the positive sentiment among business leaders and improve further its already-impressive FDI attraction, experts said.
They took a project of a big American group as an example. The group is planning a multi-billion-dollar project in Asia and its prospective investment location is either China or Vietnam.
With disturbance caused by the new coronavirus in China, they may choose Vietnam, said Do Nhat Hoang, director of the Ministry of Planning and Investment’s Foreign Investment Agency, adding that they will make final decision next month.
Sharing the same view, Nguyen Bich Lam, general director of the General Statistics Office (GSO), said that Vietnam is in favorable position to attract more foreign investments, including the relocation plans of foreign investments in China to evade the US-China trade war and tap into many free trade agreements (FTA) that Vietnam has signed, including the CPTPP and EU-Vietnam FTA.
Streamlined policies urged
GSO has forecast two scenarios for FDI in Vietnam this year, which are both more positive than 2019.
If the Covid-19 epidemic is brought under control in the first quarter, Vietnam is expected to lure US$38.6 billion of foreign capital in 2020. In a second scenario where it ends in the second quarter, the country will attract US$38.2 billion.
In the first 20 days of January this year, US$5.3 billion of FDI landed on Vietnam, a surge of 179.5% year-on-year.
At a recent Philippines-Germany Business Relations forum, German Ambassador to that country, Anke Reiffenstuel, also mentioned Vietnam as a strong competitor in attaining overseas investment.
The EU Council will be presided over by Germany in the second half of 2020 under a chair rotation system and the country’s priority in that time, according to Reiffenstuel, will be strengthening economic relations with individual ASEAN member states.
“The Philippines have a very strong competitor, and everybody’s talking about Vietnam on their approach and how they are opening up towards foreign investors,” she said. “Vietnam is very strong and of course there is also Malaysia and Singapore too.”
The ambassador added that smoothly operated one-stop shops and ease in carrying out business registrations are the main actions that can entice such investors.
According to GSO’s Lam, this is an opportunity for Vietnam to fine-tune policies to attract investors who are intending to scale down production in neighboring countries and invest in Vietnam.
Lam urged investment promotion agencies to start working with foreign investors who plan to invest in the country and discuss the preliminary investment procedures, instead of waiting until the epidemic is contained.
In the long term, it is necessary to continue improving the investment and business environment, amending policies and strategies to attract quality foreign investments, he added.
