Foreign investors vital for economy

Foreign investors vital for economy

Viet Nam has committed to ensuring a favourable, stable and safe environment for foreign investors as they play a key role in the country's import and export activities, a ministry official has said.

Speaking at a meeting held yesterday in HCM City, Tran Tuan Anh, deputy minister of Industry and Trade, said foreign direct investment (FDI) enterprises had greatly contributed to the country's socio-economic development, especially export turnover.

Last year, exports reached US$132 billion, up 15.4 per cent over 2012, of which FDI businesses accounted for 67 per cent of the country's total export value, Anh said.

Leading export items from FDI firms included mobile phones, computers, textiles, footwear, machinery and spare parts.

Exports reached $70.88 billion in the first half of this year, of which FDI firms accounted for 67.5 per cent of the country's total export value.

To date, there are 16,589 FDI projects in Viet Nam with a total registered capital of $239.7 billion.

South Korea topped the list in terms of number of projects (3,827 projects), followed by Japan and Taiwan.

Meanwhile, Japan topped the list in terms of capital with $35.7 billion,followed by Singapore and South Korea, according to the Ministry of Industry and Trade.

Anh said FDI businesses have contributed to the balance of trade, which helped the country achieve a trade surplus, stabilise foreign exchange and increase foreign currency reserve.

FDI firms achieved a trade surplus of $6.48 billion last year, up from $4.1 billion in 2012.

Also speaking at the event, Tran Thanh Hai, deputy chief of the Import-Export Department under the Ministry of Industry and Trade, said that FDI firms' export growth had been 30 per cent year-on-year.

Foreign companies have helped to establish export-producing hubs that have adapted to each region's feature, Hai added.

For example, FDI businesses specialise in making mobile phones and electronics in Bac Ninh and Thai Nguyen provinces and Hai Phong.

They make automobiles and motorbikes in Vinh Phuc Province. And they make electric wires and cables in Dong Nai, Binh Duong and Long An provinces.

FDI businesses have created more jobs, thus enhancing human resource quality and labour re-structuring.

FDI investment has had a positive impact on accelerating industrialisation and modernisation and integration in the global economy. It has also helped create significant capital for the economy.

Some high-quality services have been created such as tele-communications, international tourism, finance and banking, insurance, audit, shipping and logistics.

Challenges

Meanwhile, there has been a rapid increase in FDI firms' import turnover: from 43.5 per cent in 2010 to 56.71 per cent last year, said the ministry.

FDI businesses have not yet produced a great deal of high-value added and intensive products in Viet Nam. They also depend heavily on imported materials.

For example, mobile phones, electronics and automobiles are mainly assembled from imported spare parts; and apparel and footwear are just CMT (cut-make-trim) from imported materials.

FDI firms have not actually focused on technology transfer as committed. Also they have not contributed to support industries in Viet Nam, and they have not developed large projects on agriculture or projects in mountainous areas.

Besides challenges and solutions, the conference also discussed the outlook for FDI activities, implementation of the export-manufacturing plan, and challenges in policies related to finance and taxes, exports and imports, and customs procedures.

The event also discussed detailed recommendations on how to increase production and export of FDI firms.

Speakers said the country should focus on producing high-value exports with high value added.

It was also recommended to invest in production chains of materials, including fabric making, weaving and dying, footwear materials, high-class plastic materials, electronic components, and motorbike engines.

Speakers also recommended that Viet Nam enhance its value supply chain with companies in support industries. In addition, the country should continue to transfer technology and improve the local value content of Vietnamese products.

Investment in large-scale agricultural projects and food processing industry in rural and mountainous areas was also suggested.

There are 101 countries and territories with investment projects in Viet Nam.

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