According to JETRO's survey released on March 7, 37.5% of the 938 companies that have at least one business base overseas and plan to expand their global operations chose Vietnam in a multiple-choice questionnaire.
Vietnam now second favorite of Japanese businesses.
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China continues to be the top answer (49.4%, compared to 52.3% in the previous year). The countries of the ASEAN-6 as a whole (69.2%) exceeded China for the sixth consecutive year.
Within the ASEAN-6, there was a significant increase in motivation to expand business in Vietnam in non-manufacturing sectors, along with manufacturing in the Philippines.
"The Vietnamese economy is in good shape now and the middle class population has been increasing, which led to growing consumption," quoting Hiroshi Yoneyama, director of JETRO's international economy division in Japan Times.
As such, many service industry firms have hopes for the Vietnamese market, with trade and wholesale business also enthusiastic about the country's potential, assessed JETRO.
Responses were received from 1,261 companies for another question in the survey, which accepted multiple answers. The question asked firms to choose the most appealing points of Vietnam: 82.2% identified the size of the country's market, up from 75% in the 2013 fiscal year.
While the latest survey's figures show that interest in China dipped to 49.4% from 52.3%, the world's second largest economy was still ranked number one.
Thailand, which ranked second until the 2016 survey, was bumped down to third.
The United States remained in fourth place, but the proportion of firms interested in the nation's potential decreased to 29% from 33.5%, signaling what would appear to be growing concerns over the economic policies of US President Donald Trump's administration.
The poll was conducted on a total 9,981 companies looking into overseas business opportunities. Valid responses were received from 3,195 firms between November 17 to January 5, of which 2,591 were small- and medium-sized enterprises.
The survey covers trade and overseas investment activities, the business environment of foreign countries, as well as the utilization of free trade agreements (FTAs), foreign personnel, and digital technologies, among others.
