Vietnam News Today (Jan. 3): Vietnam Sees Huge Opportunities to Attract High-quality FDI

Illustrative photo (Photo: VNA)

Hanoi-HCM City becomes world’s 4th busiest domestic air route

The Hanoi-Ho Chi Minh City air route recorded over 10.8 million seats sold between October 2022 and September 2023, making it the fourth busiest domestic air route in the world in 2023, according to statistics from air travel data provider OAG.

It ranked behind the Jeju-Seoul route in the Republic of Korea, the Fukuoka-Tokyo Haneda and Sapporo New Chitose Apt-Tokyo Haneda routes in Japan, cited VNA.

In 2023, Vietnam's air transport market, especially the domestic market, recovered nearly to the pre-pandemic level. For the international market, the recovery was slower but showed many positive signs.

Particularly, in the domestic market, Ho Chi Minh City continued to lead the country in the number of visitors, revenue and contribution to Vietnam's tourism industry as it received nearly 5 million international tourists and nearly 35 million domestic ones in 2023.

Vietnam sees huge opportunities to attract high-quality FDI

Boasting a highly open economy, Vietnam has great potential to attract high-quality foreign direct investment (FDI) from major enterprises worldwide, according to insiders.

Despite numerous difficulties occurring in the global economy, Vietnamese FDI attraction has continued to achieve positive results in recent times.

Last year saw the total registered FDI capital in the country reach US$36.6 billion, representing an increase of 32.1% compared to the previous year.

In the final days of 2023 and the first days of this year, several industrial parks in the northern province of Vinh Phuc have been urgently building infrastructure and expanding land funds in order to be ready to welcome major foreign investors.

Specifically, Ba Thien 2 industrial park in Binh Xuyen district in Vinh Phuc province has completed technical infrastructure and attracted more than 50 foreign-invested projects from the Republic of Korea, Japan, and the United States for a short time.

Nguyen Cong Thang, deputy head of the Industrial Park Management Board of Vinh Phuc province, stressed that local authorities will strive to create optimal conditions for foreign investors in terms of administrative procedures to provide them with investment certificates and other licenses in a fast manner.

Last year saw the disbursement of FDI capital in the nation stand at an estimated US$23.18 billion, marking an increase of 3.5% on-year. This is also the highest amount of disbursed FDI capital over the past five years, according to VOV.

Photo: VOV

Insiders attributed the positive signs in FDI attraction to political stability, faster economic recovery after the COVID-19 pandemic, sustained macroeconomic stability, and controlled inflation.

Furthermore, the country has been involved in several free trade agreements, all of which have been effectively implemented and facilitated greater international investment and trade activities.

Experts pointed out that relevant ministries and branches are required to ramp up investment promotion activities in a selective manner with priorities being given to hi-tech firms, as well as removing barriers to attract more high-quality FDI moving forward.

Economic expert, Dr. Le Duy Binh stressed that foreign investors remain highly concerned about the business climate, noting that the nation needs to further improve its investment climate, upgrade its infrastructure, and move to reduce logistics costs faced by businesses.

Koreans, Chinese top foreign arrivals in Vietnam

Vietnam welcomed 12.6 million international arrivals in 2023, with the Republic of Korea (RoK) and China being the largest source markets, according to the Vietnam National Authority of Tourism (VNAT).

The biggest group of visitors came from the RoK with 3.6 million, while a further 1.7 million arrived from China.

The VNAT said that the number of foreign visitors to Vietnam accounted for 70% of the figure recorded in 2019 – the time before the COVID-19 outbreak.

A good recovery was seen in the US, the RoK, Taiwan (China), Thailand, and Indonesia, while upbeat signs came from Europe, especially Spain, Germany, the UK, and France, according to VNA.

Foreign visitors touring the Hanoi Old Quarter on Cyclos (Photo: VNA)

China – a traditional tourism feeder market of Vietnam had a slow recovery rate of 30%, and Russia only 19%.

The UN World Tourism Organization (UNWTO) and the World Travel and Tourism Council (WTTC) forecast that global tourism is on track of full recovery in 2024, reaching the pre-COVID level.

International visitors’ demand continues to revolve, requiring countries to improve the quality of the tourism offerings and experience, they said, adding advanced technologies such as AI and digital transformation will speed up the formation of new challenges for the tourism sector.

This year, Vietnam aims to welcome 17-18 million international visitors and serve 110 million domestic ones. Total tourism revenue is targeted at around VND840 trillion (US$34.6 billion).

Especially, the Visit Vietnam Year – Dien Bien 2024 with 169 national and provincial programs and events is expected to bring new experiences to visitors.

Last year, the country gained some VND678 trillion in tourism revenue, surpassing 4.3% of the set target.

Vietnam seeks solutions to protect ‘living heritage’

Experts believe that protecting ‘living cultural heritage’, or heritage holders, is important to develop a sustainable cultural life.

'Intangible cultural heritage’, or 'living heritage' has a very important significance in life. Living cultural heritage creates opportunities for communities and individuals to have a sense of identity and continuity; promotes connections in society, respects cultural diversity and human creativity, thus helping the community and individuals connect with each other in the big world,” said Le Thi Thu Hien, director of the Department of Cultural Heritage.

Donna McGowan, director of the British Council in Vietnam, said Vietnam has a valuable treasure of intangible cultural heritage such as traditional handicraft products, rituals, performing arts, and indigenous knowledge deeply rooted in the national culture. With more and more cultural values recognized both domestically and internationally, the field of cultural heritage has been witnessing active changes, benefiting practitioners and community members who contribute an important role to sustainable development.

A study of the British Council found that people in many localities in Vietnam believe that preserving cultural heritage is an abstract concept and that this is the task of state agencies and non-government organizations. McGowan said it is necessary to find strategies and identify challenges and opportunities in using intangible heritage to obtain sustainable development goals.

Iain Frew, the British Ambassador to Vietnam, praised the values of tangible and intangible heritage in Vietnam. More and more Vietnamese cultural heritages have been recognized domestically and internationally. Vietnam is seeking the way to take full advantage of the values to ensure that cultural heritage will become the center of sustainable development.

When the community’s awareness is improved and people raise ideas about activities to conserve and promote heritage value, this will lead to a good future for cultural heritage. More importantly, the direct participation of the community will help create new opportunities that bring benefits and livelihoods to them, VNN reported.

Protecting ‘living cultural heritage’, or heritage holders, is important to develop a sustainable cultural life.

Pham Cao Quy from the Cultural Heritage Department said intangible cultural heritage exists inseparably from people. It can be recognized through human performances and artifacts. It is inherited, preserved, practiced, created and passed on through generations. This means that heritage only exists if the community has a sense of identity and continuity, connecting the past with the present and the future.

“Protecting and promoting intangible cultural heritage value is protecting people, creating conditions so that people (artisans, practitioners, communities) have the best and most suitable conditions to practice heritage,” he said.

“The policies related to heritage must be built and implemented with the human being put at the center,” Quy added.

According to Nguyen Thi Thu Trang from the Cultural Heritage Department, as high- intellectual humane resources, cultural heritage can serve the development of cultural industries, especially cultural and heritage tourism.

Based on national cultural heritage, the tourism industry can create cultural services that turn heritage into a special commodity. Heritage tourism also creates sustainable livelihoods for communities around cultural heritage and tourist destinations.

In recent years, the term 'heritage economics' has appeared as a new trend in the market economy. This is probably one of the efforts to attach heritage to socio-economic development policies.

In other countries, in addition to development projects, people have begun paying attention to protecting cultural heritage from the perspective of urban heritage and heritage economics.

Cultural heritage can only be preserved when it is used to serve the goal of comprehensive development of the Vietnamese people. Cultural heritage must be preserved as a living organism in the life of the community and create sustainable livelihoods for the community.

Trang stressed that big goals can only be obtained on the basis of a perfect legal system, mechanisms and policies created by the state and supported by the entire society.

Meanwhile, the British Council suggested the establishment of small museums in communities, with traditional costumes, production tools, ceremonial objects, musical instruments, and homemade household products.

The community and heritage holders must be put at the center because protecting living heritage is the most important thing to build a resilient and sustainable society for the future.

Import and export recovery in 2023 to create momentum for breakthrough in 2024

Although Vietnamese import and export activities in 2023 have yet to record a strong recovery, the decline has narrowed significantly, a factor that will serve as a premise for prosperity in the year ahead.

Import and export activities last year saw great support from international economic integration, thereby helping the country to become an important link in terms of the global value chain, with many strong industries continuing to continuously hold the top position in world export turnover.

Amid difficulties occurring in the world economy coupled with a general decline in the global aggregate demand, although Vietnamese import and export activities did not increase compared to the previous year, the decline significantly narrowed.

Total export-import turnover in 2023 was estimated to have reached US$683 billion, of which exports hit roughly US$354.5 billion and imports stood at around US$328.5 billion.

The trade balance continued to enjoy a trade surplus for the eighth consecutive year with an estimated surplus of nearly US$30 billion, a three-fold increase over 2022.

Assessing import and export activities in 2023, a representative of the Import-Export Department under the Ministry of Industry and Trade said that the country has actively taken advantage of opportunities from the recovery of large, traditional markets in a bid to boost exports.

The trade surplus can primarily be put down to imports falling more sharply than exports, thereby showing difficulties in producing goods for exports, VOV reported.

Vietnamese rice exports in 2023 enjoy both quantity and price benefits.

The import of raw materials, machinery, and equipment for production has not increased significantly, thereby indicating that although export orders have recovered, there remain numerous difficulties ahead.

The highlight of exports last year came thanks to the effective management and expansion of export activities to China, thereby contributing to increasing export turnover as the neighboring country became the only market among major Vietnamese export markets to record positive growth.

Most notably, Vietnamese exports to China soared by about 8.1% for the whole of 2023, while other major markets witnessed a fall.

Le Hoang Tai, deputy head of the Trade Promotion Agency under the Ministry of Industry and Trade, commented that economic and trade cooperation activities between the country and China over recent years have continued to develop. According to statistics compiled by Vietnam Customs, during the past 11 months of 2023, total Vietnamese import-export turnover with China reached a figure of US$155.8 billion, with two-way trade in 2023 estimated to have hit the same turnover level as the two sides achieved in 2022.

“Although China has an important position and role and is viewed as a potential market, Vietnam's economic and trade cooperation with China is still below both nations' full potential when imports and exports still account for a very modest proportion in their total trade turnover," Tai continued.

Market expansion with products meeting 'green' standards

Entering 2024, many experts believe that import and export activities will continue to face many unforeseeable risks.

The trend of trade protection appears more with many countries taking measures aimed at bringing investment back home, while also erecting trade barriers to protect and boost domestic production.

Looking at changes occurring in different markets, many businesses affirm that converting to green production is no longer an option but a mandatory requirement and an imperative of markets.

Vu Duc Giang, chairman of Vietnam Textile and Apparel Association (Vitas), affirmed that in addition to price factors, product quality and delivery time, greening and sustainable development are competitive criteria which major markets such as the United States, the EU, and Japan require from suppliers.

“If Vietnamese export enterprises want to survive, they must overcome the ‘green’ problem in production activities, with many criteria such as meeting waste treatment standards, energy-saving production, and waste recycling solutions. In the textile industry, just by using ‘green’ materials, input prices are 300% higher than traditional products. This is also a significant obstacle for textile and garment enterprises to continue on the path of “greening," Giang pointed out.

With the world forecast to continue to face major and unpredictable changes with many interwoven opportunities and challenges, Nguyen Cam Trang, deputy head of the Import-Export Department under the Ministry of Industry and Trade, noted that many markets pay greater attention to product standards related to consumer safety, sustainable development, and climate change response.

“However, exports in 2024 have a wealth of opportunities to recover and grow when inventory problems in many countries are gradually being overcome. Efforts to accelerate negotiations and diversify Vietnam's export markets will bring more competitive advantages to exports in the coming time," Trang optimistically shared.

In order to increase import-export turnover over the coming year, Deputy Minister of Industry and Trade Phan Thi Thang affirmed that the Ministry of Industry and Trade will speed up negotiations towards signing agreements, as well as pledging new trade links with potential partners in a bid to diversify products, markets, and supply chains. All of this will be done while supporting businesses in taking advantage of commitments in free trade agreements (FTAs) to bolster exports.

“In addition to key markets, the Ministry of Industry and Trade will coordinate with the Ministry of Agriculture and Rural Development to negotiate with China to open more export markets for Vietnamese fruit and vegetable products. The focus will be on regulating the speed of customs clearance of import and export goods in the Vietnam -China border gate area, especially seasonal agricultural and aquatic products to shift swiftly to official exports,” Deputy Minister Thang added.

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