Experts Suggest Vietnam Redefine Competitive Advantages to Attract UK Investment
Vietnam needed to redefine its competitive advantages in the new period to be ready to receive foreign direct investment flows from the United Kingdom (UK), experts have said, as cited by Viet Nam News.
Despite cheap labor costs and abundant personnel resources, Vietnam should rely on new factors including an attractive and transparent investment environment, simplified and digitalized administrative procedures, and infrastructure development, they said.
In addition, the UK is a country with a developed high-tech industry, so to effectively attract FDI from the UK, Vietnam should establish an ecosystem that could effectively support domestic suppliers with sufficient management capacities so that they could meet the needs of tier 1 and tier 2 suppliers of British foreign-invested enterprises in Vietnam.
According to experts, the UK's investment in Vietnam will likely increase thanks to many favorable factors. These include close relationships in multiple areas such as education, science and technology, industry, and energy as well as the UK's applause for Vietnam's commitment to achieving net-zero energy emissions by 2025. The UK then vows to provide Vietnam with technical support, and expertise as well as establish partnerships and energy transition and climate change programs for Vietnam.
|A part of HCM City. The city takes the lead with 244 UK-financed projects with capital totalling over $909 million or equivalent to 21.6% of the total UK investment in Vietnam. Photo: VNA|
As of August 20, 2023, the UK had 542 direct investment projects in Vietnam with registered capital of about $4.29 billion, ranking 15th out of 143 countries and territories investing directly in Vietnam.
The processing and manufacturing industry lured the lion's share of UK investment with 117 projects worth $1.59 billion, accounting for 38.1% of the total investment capital.
The property sector came next with seven projects, valued at $701.44 million or 16.7% of the total. It was followed by the mining sector, wholesale and retail, car and motorbike repair, accommodation and food services, water supply and waste treatment, science and technology, and education.
UK investors poured their investments into 36 localities and offshore areas in Vietnam. Of which, Ho Chi Minh City took the lead with 244 projects with capital totaling over $909 million, or equivalent to 21.6% of the total UK investment in Vietnam. Offshore areas came next with five projects capitalized at $688 million and Dong Nai province with 11 projects valued at $670.8 million. Others were Hai Duong, Long An, and Binh Duong provinces.
Over the past eight months of 2023, the UK had a total of 34 new investment projects in Vietnam with registered capital reaching $48.3 million. Among European countries, the UK is now the second-largest foreign investor in Vietnam, just after the Netherlands.
According to Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan, the UK-Vietnam Free Trade Agreement (UKVFTA), taking effect in May 2021, and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which the UK joined on July 16, 2023, would be strong drivers to further develop bilateral relations, especially in investment in the future.
|Over $15.29 billion was channeled into 2,608 new foreign direct investment (FDI) projects as of October 20. Photo: thesaigontimes.vn|
Over $15.29 billion was channeled into 2,608 new foreign direct investment (FDI) projects as of October 20, respectively up 54% and 66.1% year on year, statistics showed.
It added up to more than $25.76 billion in total FDI during the period, rising 14.7%, reported the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment
Of the total, over $5.33 billion was added to 1,051 existing projects. Though the additional capital fell 39%, the project number still increased by 19.4% from a year earlier, showing investors were confident in Vietnam’s investment climate so they decided to expand their projects.
Meanwhile, foreign investors spent over $5.13 billion on contributing capital to and purchasing shares of domestic companies via 2,836 transactions, respectively rising 35.4% and dropping 5.4%.
During the period, about $18 billion was disbursed for FDI projects, up 2.4% year on year, according to FIA.
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