Vietnam hopes to attract more Japanese investment in big, influential projects

Minister of Planning and Investment Nguyen Chi Dung

What is the purpose of your visit?

This is the first time I visit Japan as the Minister of Planning and Investment. This visit aims to strengthen the comprehensive strategic partnership between Vietnam and Japan and to prepare for Prime Minister Nguyen Xuan Phuc’s upcoming visit to Japan in June, after the recent visit to Vietnam by the Emperor and Empress of Japan.

Since the establishment of diplomatic relations between the two countries in 1973, the relationship has been growing fast in many areas and has now stepped into a new era, deepening in terms of quality, not just size. Japan is now the biggest sponsor of Vietnam, with the total committed ODA of $30 billion, and the second biggest investor, the third biggest trade partner, and the fourth biggest tourism partner. My visit was meant to enhance this cooperation and we hope that in the next period there will be breakthroughs that will increase the effectiveness of the cooperation in all these areas.

Like you just said, Japan is the second biggest investor in Vietnam. During your trip, you will meet many big Japanese companies. To which fields and sectors do you hope to attract investment from Japan?

We are looking to attract investment in high-technology, clean technology, source technology, manufacturing, supporting industry, and high-tech agriculture.

Besides the traditional channel of direct investment, we would like to attract investment in the form of public-private partnerships (PPP) and mergers and acquisitions.

With PPP, we want to enlist Japanese investors to important infrastructure projects. For mergers and acquisitions, we hope Japanese investors will join in the process of equitising Vietnamese state-owned companies by becoming strategic partners.

By signing with Japanese investors, we hope not only for capital but also for technology and modern corporate governance experience.

It is too soon to talk details but I can disclose this: in this trip, we are going to talk with some big Japanese corporations about large-scale projects that would help create an industry that is going to be a driver of growth for Vietnam and a basis to attract further investment from small and medium-sized companies that would develop the support industry in Vietnam.

Nhật Tân Bridge, photo D.T

PPP is an important investment format that Vietnam is hoping to develop. Which projects do you hope Japanese investors will be interested in?

The projects of priority are the North-South Expressway, Long Thanh International Airport, and urban transport projects, such as the Hanoi and Ho Chi Minh City Metro, and in the future, the North-South Railway. These are all big projects that will have a resounding impact on Vietnam’s socioeconomic development.

The legal framework for investment in the PPP format already exists, but we are currently reviewing it to make it more transparent and easier for investors to join PPP projects.

A few days ago, the Prime Minister announced some important changes regarding the North-South Expressway project. Now, instead of carrying it out in separate sections, we will clear the whole site at once to carry out the project in one go. Additionally, instead of four to six lanes, the project is going to have six to ten lanes. The changes are meant to meet the demand of the country’s development in 30-50 years.

But that is only a vision. We cannot have eight to ten lanes at once, so at first it is still going to be four to six lanes. Maybe we will not have a big road immediately, but we will clear the whole site so that when we want to expand the road we will be able to do it faster and cheaper.

The government also decided to set aside VND55 trillion ($2.43 billion) as reciprocal capital for PPP projects. These are important bases from which investors, including Japanese investors, can consider investing.

The Vietnamese-Japanese relations have been good but there is still room for growth. What would be the most important factor that would push the relations to the next level?

Without a doubt, the most important factor is trust. The two countries have to maintain strategic trust, and agree in views and cooperation plans. Only then will the relationship be able to reach the next level.

I hope that after my visit the cooperation will be enhanced.

In terms of investment, just as I said above, we hope that Japan can simplify ODA procedures, remove some criteria on the origin of goods, and decrease the cost of borrowing so that ODA projects can move fast and bring socioeconomic benefits to Vietnam sooner. This will, in turn, also increase the effectiveness of the ODA that Japan lends to Vietnam.

On this occasion, I want to emphasise this: the Trump administration’s announcement of withdrawal from the Trans-Pacific Partnership has fundamentally changed our outlook on the global economy. The world is rearranging into a new order, with the forming of some new supply and production chains. In this context, we want to be on the same page with Japan in terms of where we are in this new order and the global value chain. We want to cooperate with Japan to push the development of the Vietnamese economy so that it can grow faster, more stable, with more independence, and can connect to the whole world.

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