Sun rising on Japan-Vietnam relations

How do you perceive Japan’s current attention towards Vietnam after your recent visit to this country?

During the trip, I got a chance to meet the Japanese business community as well as politicians and recognised that Japan shares a sense of sympathy for Vietnam’s current hardships.

They said albeit Vietnam faced certain economic vulnerabilities like inflation, unstable macro-economy and slowing economic growth, the country would soon get back to the development orbit with the Vietnamese government’s strong commitment to weather the storm.

Japan shows strong confidence towards Vietnam’s long-term growth perspective, and asserted it continued looking at Vietnam as one of the top investment destinations.

In the recent past, particularly after the earthquake and tsunami tragedy in Japan in early 2011, Japanese firms scaled up outbound investments to  Southeast Asian countries. Does this mean there are more opportunities for Vietnam?

It is true that Japanese investors are shifting investments into Southeast Asian region. They target diverse markets like Thailand, Indonesia and Myanmar and not only Vietnam. They set up shop where they view as having favourable business climate and multiple investment opportunities, so Vietnam must strive to make the most of this capital flow.

If in the past our major rivals were Thailand and Indonesia, now a rising Myanmar joins in the race.

Japanese investors said they appreciated investment in Myanmar where investment climate and democracy are being constantly ameliorated. Besides, the government of Myanmar is stepping up efforts to soon have in place an investment law compatible to the world practices.

What should Vietnam do to appeal to Japanese investors?

Though saying that Vietnam possesses a charming investment climate, Japanese investors ponder over the stability of the macro-economy and policy consistency in the country. Volatile development policies concerning the auto industry stands as a typical example. Policy changes have bothered investors. Over the year we dug into this issue but no explicit solutions are currently in place. Thereby, clear, constant and transparent policies are of foremost importance.

One of Japanese investors’ greatest concerns is Vietnam’s backward infrastructure conditions, particularly regarding expressways. Human resources quality is another headache. These are the bottlenecks Vietnam must shortly tackle if it does not want to concede the chance to other regional players in luring Japanese investors.

What sectors should we foster for Japan investments?
 
There are a number of fields such as hi-tech and supporting industries. Some Japanese firms express their desire to step into developing supporting industry for the auto industry. They also pay heed to urban development, particularly developments that match surrounding eco environment, and investments into infrastructure and energy. In short, most Japanese business giants want to drop anchors into Vietnam and what we must do is to create an enabling environment to welcome investors.