Surf’s up: Japan urges enterprises to catch ‘third investment wave

“Investment from Japan is booming and under a dialogue mechanism between the two countries – Vietnam-Japan Joint Initiatives – various Japanese business associations and government departments are working to improve Vietnam’s investment environment,” JBAH chairman Kimio Yamaguchi announced at the Vietnam-Japan Connection Conference in Ho Chi Minh City last Friday.

Representatives from more than 100 Japanese businesses operating in Vietnam took part in the event which was co-hosted by JBAH and the CEO Club.

There, Japanese investors put proposals before government and businesses that outlined the break of what they say is a ‘third investment wave’.  

Hirotaka Yasuzumi, managing director of the Japan External Trade Organization (JETRO) in Ho Chi Minh City, noted proposals in the areas of infrastructure development, investor services, supporting industries, and assistance for local small and medium-sized businesses. He stressed the importance of solving tax issues and laying out realisable policies for long-term development.

JBAH vice chairman Masaki Yamashita, general manager of Bank of Tokyo-Mitsubishi UFJ Ho Chi Minh City, said the government side is likely to be slow in absorbing the proposals, but that he anticipated a much smoother process from the business side.

“The key point here is corporate culture. Japanese and Vietnamese businesses look at challenges and opportunities differently. Suppose there were two mountains, one small and one big, each with a treasure at the top. The treasure on top of the big mountain is much bigger than that of the small. Regardless, most Vietnamese businesses would rather quickly ascend the small mountain for less, than taking their time going up the big one for more. It is important to Japanese companies that their partners recognize long-term value, he added.

“To bridge this gap, the two sides have to understand each other’s business culture so they can find compromise,” Yamashita said.

“Trust is a must,” he added.

The conference was dedicated to discussing and educating on business culture. Esuhai Co. Ltd. director Le Song Son stressed that while there would always be differences between the two sides, partners shouldn’t forget that they are on the same side and to sit down and focus on the problem, not waste time battling each other.

JBAH chairman Yamaguchi said his association currently had 648 registered members and he expects this number to rise quickly, as he has seen the signals of an oncoming investment flow, particularly in the field of supporting industries.

Vietnam is second in South East Asia after Thailand with 1,200 Japanese companies calling it home. The latter’s supporting industries are already well developed.

Yasuzumi emphasised that investment focuses would continue to be Ho Chi Minh City, Dong Nai, Binh Duong, Long An, and Ba Ria-Vung Tau but that there would be expansions into the Mekong Delta, Binh Phuoc and Lam Dong provinces as well as some north of Hanoi. He added that central and Mekong Delta provinces with good infrastructure to Ho Chi Minh City would be highly competitive.

In a recent development, Ho Chi Minh City’s Investment and Trade Promotion Centre, and the Japanese Consulate General plan to co-organise a forum on October 9 at the White Palace Convention Centre.