Not only Japan but also a score of nations is relocating their production facilities from China to Vietnam, according to Kobayashi Yoichi, chairman of the Mekong – Japan Business Cooperation Committee from the Japan Chamber of Commerce and Industry (JCCI).
Overview of the meeting. Source: Ngoc Thuy.
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The US-China trade war has added to this cause through the growing popularity of 'China plus one' strategy, which refers to companies operating in China but still active in other Asian countries to reduce its over-dependence on the Asian giant.
Sharing the same view, Vu Tien Loc, chairman of VCCI, said Vietnam is expecting the investment wave from Japan and other countries, including multinational, medium and small companies.
“These companies would facilitate a strong linkage between Vietnam and Japan,” Loc added.
Currently, large scale projects and automobile joint ventures mainly import input materials and parts from Japan, South Korea and China, thus generating low added value for Vietnam.
Vietnam, therefore, hopes to encourage small and medium enterprises (SMEs) in supporting industries from advanced countries coming to Vietnam as a way to add more value to the economy, Loc continued.
Major corporations from Europe, the US and Japan have been present in Vietnam, but the main issue is how to increase the localization rate in their production.
“To achieve this target, Vietnam would need a strong community of SMEs and encourage foreign companies of similar scale to come to Vietnam,” he added.
The cooperation between Vietnam and Japan on various issues has been a major contribution to Vietnam’s socio-economic development, according to Loc.
Shinichiro Shimizu, managing executive officer of Japan Airlines, said the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) coming into force would open up more cooperation opportunities between its member countries, including the Vietnam – Japan relation.
Japan currently is the second largest investor in Vietnam, the third largest source of tourists to Vietnam and Vietnam’s fourth largest trading partners with bilateral trade turnover of US$40 billion in 2018.
