However, the first three months saw a 25 percent decline of registered FDI capital in the country with only $5.8 billion.Manufacturing remained the most attractive industry to foreign investors, receiving commitments of $3.44 billion and accounting for more than half of total registered capital.
Manufacturing remained the most attractive industry to foreign investors
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South Korea retained its position as the Vietnam’s leading FDI source in the first quarter of this year, mainly thanks to the additional of over $500 million LG Innotek Co pumped into its exiting project in the northern port city of Hai Phong.
During the reviewed period, South Korean firms invested $1.84 billion in Vietnam, accounting for 31.6 percent of the country’s total registered FDI.
Beside to South Korea, businesses from Hong Kong invested $689 million in Vietnam, making up 11.9 percent of the total FDI while those from Singapore injected $649 million, equivalent to 11.2 percent.
Ho Chi Minh City continued to be the largest recipient of FDI during the period with $1.7 billion, while the northern port city of Hai Phong followed with $925 million.
The third largest recipient of FDI was the southern province of Binh Duong with $565 million.
FDI firms posted an export turnover of nearly $39.34 billion in the first three months of the year, accounting for 71.5 percent of the nation’s total export turnover.
The firms meanwhile spent $31.75 billion for imports, leaving it to run a trade surplus of $7.59 billion in the first quarter of 2018.
According to experts, foreign investors will continue to find traditional export-oriented sectors, such as electronics, garments, and footwear, to be attractive this year.
Besides, with growing urbanization and rising incomes, industries such as education, real estate, retail, food and beverage, e-commerce, and FMCG will continue to grow in 2018.
The aforementioned industries will continue to be a priority for the government in the short term. For the long-term, the government is shifting its focus on high-tech and environmentally friendly investments and projects such as renewable energy and high-tech agriculture.
According to Phan Huu Thang, FIA’s former director and deputy chairman of Vietnam Association of Foreign Invested Enterprises, Vietnam has so far planned to focus on attracting FDI to high-tech and environmentally friendly projects. Notably, Vietnam will stimulate investment in renewable energy projects, high-tech agriculture, as well as smart cities, among others.
It will try to attract FDI, while keeping its national identity and safeguarding the environment, Thang said, adding that the country will build solutions to create balance in FDI attraction, instead of focusing on Hanoi, Haiphong, Bac Ninh, Binh Duong, Ho Chi Minh City, and Thanh Hoa.
Recently, with assistance from the World Bank, the Ministry of Planning and Investment has drafted an FDI strategy for 2018-2023, focusing on priority sectors and investment quality, rather than quantity. The draft aims to incentivize and make it easier for investors to invest in high-tech industries. The initial focus is on four major sectors: manufacturing, services, agriculture, and travel.
According to experts, three decades of opening the doors to FDI is long enough to summarize and evaluate the effectiveness of attracting foreign investment to craft appropriate policies to focus more on quality, optimize the benefits of capital flows, as well as strengthen links between domestic and foreign enterprises to serve the socioeconomic development of Vietnam.
