According to the Ministry of Planning and Investment’s Foreign Investment Agency (FIA), foreign investors disbursed US$6.75 billion in their projects in Vietnam during the period, a year-on-year increase of 10 percent.
Manufacturing and processing attracted the lion’s share of FDI with $5.18 billion
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Experts attributed this year’s decline in the registered capital to the reason that the first five months of 2017 saw some new large-scale projects licensed while those already operating with high capital also expanded their investment scales.
In January-May 2018, foreign firms invested in 17 industries and sectors, of which manufacturing and processing attracted the lion’s share of FDI with $5.18 billion, accounting for 52 percent of total investments.
The real estate sector came second with $1.07 billion, making up 11 percent of the total, while the wholesale and retail sector ranked third with $1.02 billion or 10.3 percent of the total.
South Korea retained its position as Vietnam’s leading source of FDI with $2.63 billion, accounting for 26.5 percent of total investments in the country, followed by Japan with about $1.52 billion or 15.4 percent, and Singapore with $1.11 billion or 12 percent.
Among 53 localities, Ho Chi Minh City lured the largest FDI in the five month period, with $2.93 billion, accounting for 24 percent of the total FDI registered in the country. The northern port city of Hai Phong and the capital city were the runners-up with $1.07 billion or 11 per cent and $835 million or 8.4 percent, respectively.
According to the FIA, the foreign-invested sector posted a five-month export turnover of $66.7 billion, up 15 percent year-on-year and making up 72 percent of the country’s total export value.
The sector’s imports also experienced a slight increase of 7 percent to $52.85 billion. That meant it enjoyed a surplus of $13.81 billion during the period, the FIA said.
The FDI sector has become an important part in Vietnam’s economy, contributing about 25 percent to social investment capital and 20 percent to gross domestic product, according to the Ministry of Planning and Investment (MPI).
Close to 58 percent of total FDI capital has went to the processing and manufacturing industries, helping Vietnam increase the value of products and make domestic economic sectors more competitive. The FDI sector last year made up 72 percent of total export value and generated about 3.5 million direct jobs and 5 million indirect jobs.
In a move to maximize the spillover effects and added value of the FDI investment source, the MPI has drafted the country’s new-generation FDI attraction strategy for 2018-2030, in which it plans to shift from profit-based incentives to efficiency-based incentives.
Under the strategy, which was drafted with the support from the World Bank, Vietnam will also shift from luring appropriate investors for Vietnamese products to develop suitable products (including business environment and appropriate investment conditions) for the kind of investment that Vietnam needs in the future.
WB experts said that the country has a number of new priority areas such as automobiles, motorbikes and supporting industries, machinery, industrial equipment, logistics, high-value agricultural products, environmental technology, renewable energy, information technology application services, financial and education services.
