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New wave of FDI returning

VGP – Recent visits to Viet Nam by foreign business delegations have signaled the warming of the FDI inflow amid domestic economic hardship.

October 02, 2012 2:48 PM GMT+7

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A few months ago, FDI attraction was still an alarming concern as Viet Nam was among few Southeast Asian nations experiencing foreign investment decrease. Report released by United Nations Conference on Trade and Development showed that Viet Nam lured some US$7.43 billion in 2011, down US$570 million against 2010 while the total volume of FDI inflow to Southeast Asia increased by 14% to US$117 billion.

In early September, US Trade Representative Ron Kirk led a business delegation to Ha Noi to send the message that the US expects to have greater role in Viet Nam’s economy. During that time, a survey conducted in Singapore by the US Commerce Department and US Chamber of Commerce Singapore revealed that up to 57% of questioned businesses said they would expand production in Viet Nam.

In mid-September, the visit by Germany’s Minister of Economy and Technology Philipp Roesler who was accompanied by representatives of 230 enterprises warmed up investment environment in Viet Nam. After his visit, other delegations from UK, France and Japan also came to Viet Nam to seek opportunities in such fields of finance, ports, energy and infrastructure. Chairman of Japan Chamber of Commerce an Industry (JCCI) Tadashi Okamura said that Japanese Government advocates stronger investment in Viet Nam.

Foreign investors are increasingly interested in Vietnamese market, Chief economist of Vinacapital Alan Pham recently told the newswire VnExpress. He said Viet Nam has a promising market with a population of nearly 90 million, cheap workforce and the country is now benefiting from foreign investors’ production reallocation trend.

Foreign investors have also changed their approach. Ten years ago, they wanted to earn quick profits by investing in finance. Now, the majority of foreign capital flows to FDI projects- a signal of long-term commitment, Dr. Alan Pham noted.

Another change, as said by economist Bui Kien Thanh, is that foreign investors now pay more attention to local market instead of only focusing on production. The best example of this trend is the increasing presence of fast food trademarks and retailers in Viet Nam.

By Hai Minh