Vietnam aims for more Japanese investments

This was highlighted by Director Do Nhat Hoang of the Foreign Investment Agency at the seminar on attracting Japanese firms into local industrial parks held by the Ministry of Planning and Investment in Hanoi on Monday.

There are currently 283 industrial parks in 58 provinces and cities nationwide, Hoang said, but up to 35 per cent of the space remains unoccupied.

“We want to get connected to the overseas investment strategy of Japan to fill up these industrial parks,” he said.

Minister Hideo Suzuki at the Japanese embassy in Vietnam said his government had developed a new development strategy, including promoting outbound investment, especially to Asian countries.

To deploy such a strategy, Japan has developed a supporting program for enterprises investing abroad to overcome the current economic stagnation in Japan.

Hideo Ohkubo, chairman of the global promotion committee for small and medium enterprises of the Tokyo Business Association, said the aging situation in Japan had narrowed down the domestic market.

Besides, Japan is coping with stagnant exporting industries due to continuous appreciation of the yen, the sharp decline in international competitiveness of Japan against the rise of other Asian countries and the consequences of the earthquake and tsunami last year.

However, whether Japanese firms will choose to invest in Vietnam in response to their government’s strategy remains a question.

Ohkubo estimated up to 97.3 per cent of the 220,000 small and medium enterprises in the manufacturing industry did their businesses at home.

Most of the Japanese investors overseas are large groups and corporations, while small and medium firms haven’t got used to investing abroad, he said.

Japanese businesses consider Vietnam a more attractive destination for production expansion than India and Thailand, and the third appealing destination in terms of consumption market after India and Indonesia.

“Still, most Japanese small and medium-sized enterprises are hesitant to invest in Vietnam,” said Ohkubo.

Yoshifumi Tsujio, an expert at the Japan International Cooperation Agency (JICA), said Japanese firms would make investment decisions more easily when Vietnamese industrial parks have completed infrastructure.

Besides, Japanese enterprises seek sufficient services, local staffs that comprehend the Japanese language and culture, and Japanese employees who are willing to reside in industrial parks.

Ohkubo said India, Indonesia and Thailand had developed industrial zones that satisfy the working and living demands of Japanese investors.

Even the lately opened Myanmar has accepted Japan’s consultancy to buil Japanese-style industrial parks to attract Japanese investors.

He recommended Vietnam to turn industrial parks to small cities to attract FDI capital of small and medium Japanese enterprises.

Japan is the 4th biggest foreign investor in Vietnam with over 1,600 projects worth $23.6 billion, according to the Ministry of Planning and Investment.