Vietnam attracts foreign capital eight times economy’s in 2003-14: Financial Times

Vietnam attracts foreign capital eight times economy’s in 2003-14: Financial Times

The amount of foreign direct investment (FDI) Vietnam attracted during the 2003-14 period was over eight times the of its national economy, according to an index measuring FDI channeled into the world’s emerging markets conducted by UK-based newspaper Financial Times.

Vietnam took the lead in the ranking of countries with new FDI projects with 8.14 points, outstripping other larger emerging markets like China and Russia, and other economies in Southeast Asia, according to the fDi index.

In the index, a score of one indicates that a country’s share of global inward FDI matches its relative share of global gross domestic product, while a score greater than one signifies a larger share than indicated by its GDP, and a score of less than one, a smaller share, according to the Financial Times.

The index was surveyed by fDi Intelligence, a data division of the Financial Times, which looked at inbound investment since 2003 relative to the of each country’s economy.

With 8.14 points, Vietnam is considered the country with the most new FDI projects during the 12-year period, far ahead of the nearest competitors, Romania and Hungary, as well as regional rivals Malaysia and Thailand.

The fDi index, released on July 14, analyzed data gathered from 71 countries worldwide in 2014, according to the Financial Times.

Vietnam has reached the highest point of the developed countries and emerging economies, while attracting more than 100 new FDI projects in 2014 alone.

In recent years, Vietnam's economy has grown rapidly thanks to investment and exports, the Financial Times said.

In the 2003-14 period, Vietnam added more than 2,000 FDI projects. In particular, most of the FDI projects in the Southeast Asian country are concentrated on the manufacturing sector, given its advantage in abundant and relatively cheap labor resources.

Besides, the country has actively improved its business environment, reducing corporate income tax from 25 percent to 22 percent and reforming the country’s banking and credit systems.

According to the Financial Times, although China was the leading destination for new FDI projects in the 2003-14 period, investment in the country has slowed down in recent years.

The growth rate of China's GDP has outstripped the number of new FDI projects, causing the country's score on the chart to decline over the years.

With a score of 0.56, the rate of new FDI projects in China is too small in relation to its GDP.

Of the top five economies in the world, the UK is the only country with a score greater than one.

The remaining countries with less-than-one scores include the U.S. (0.56), Japan (0.26), Germany (0.99) and China (0.56).

FDI in Vietnam in the first six months of 2015 was mainly channeled into processing, manufacturing, real estate and retail, according to government website chinhphu.vn.

Accordingly, total newly-registered and additional FDI capital reached $1.19 billion in June, bringing the figure in the first half of the year to $5.49 billion, down nearly 20 percent year on year.

Of the amount, newly-registered FDI attained $3.83 billion, while additional FDI hit $1.65 billion, down 21 percent and 17 percent, respectively, compared to the same period last year.

Total FDI disbursement was estimated at $6.3 billion, a year-on-year rise of 9.6 percent.

Minister of Planning and Investment Bui Quang Vinh late last month told Bloomberg that committed FDI will reach $23 billion in 2015, up five percent year on year.