Vietnam's FDI disbursement rises nearly 7% in Jan-June

Disbursement of foreign direct investment (FDI) to Vietnam rose by 6.8% year-on-year in the first six-month period to US$9.24 billion, a report of the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment has shown.

Production at Garment 10 Company. Photo: Thanh Hai

An article from the UK-based lexology.com suggested the local economy is in a more favorable position compared to other countries in attracting FDI during the Covid-19 pandemic.

According to the article, the country’s efforts in opening up the economy and integrating into global trade are two major factors for foreign investors.

To grasp new opportunities from Industry 4.0 and digital transformation, Vietnam is moving from low-technology production to new business models with higher added-value using modern technologies, it said.

In this regard, electronic production has been one of the fastest-growing sectors in Vietnam, with export turnover of electronic products rising from US$47.3 billion in 2015 to US$96 billion in 2020, accounting for one-third of total external revenue.

Data from the Ministry of Industry and Trade (MoIT) revealed foreign-invested sector made up 95% of export turnover from electronic products in the first quarter of this year, noting “the trend is set to stay unchanged in foreseeable future.”

The manufacturing and processing sector leads the pack

Due to the difficult economic environment as a result of the Covid-19 pandemic, Vietnamese authorities approved 804 new projects with total registered capital of US$9.55 billion year to June 20, down 43.3% in the number of projects but up 13.2% in capital interannually, while 460 existing projects have been injected an additional US$4.12 billion, down 12.5% in number but up 10.6% in the capital. 

During this period, 1,855 projects had over US$1.61 billion in capital contributed by foreign investors, down 55% in the number of projects and 54.3% in value year-on-year.

Investors have poured money into 18 fields and sectors, in which manufacturing and processing led the pack with investment capital of nearly US$6.98 billion, accounting for 45.7% of total registered capital. Electricity production and distribution came second with US$5.34 billion, or 35%, followed by real estate with US$1.15 billion.

FIA’s report added that out of 80 countries and territories having projects in Vietnam in the first six months of the year, Singapore took the lead with US$5.64 billion, or 37% of the total registered FDI for new projects, followed by Japan with US$2.44 billion, or 16% and South Korea with US$2.05 billion or 13.4%.

Among 56 cities and provinces having received FDI in the January-June period, the southern province Long An has attracted the largest portion of capital commitments with US$3.57 billion, or 23.4% of the total. Ho Chi Minh City came second with nearly US$1.43 billion (9.3%), followed by the southern city of Cantho with US$1.32 billion (8.6%).

As of present, Vietnam is home to 33,787 valid foreign investment projects with a combined registered capital of US$397.89 billion, while the disbursed amount stood at US$241.1 billion, or 60.6% of the committed amount.