January results bode well for improved post-pandemic foreign direct investment

January results bode well for improved post-pandemic foreign direct investment, illustration photo

According to the Ministry of Planning and Investment’s Foreign Investment Agency (FIA), Vietnam counted a total foreign direct investment (FDI) inflow of $2.1 billion, an increase of 4.2 per cent on-year, while realised FDI came out at $1.6 billion, up 6.8 per cent as compared to that in the same period last year.

Sixty per cent of the total has been contributed by expanded projects. Around $1.27 billion was added to 71 projects currently underway, up 54.3 per cent in the number of projects and 169 per cent in value. The three largest ones have become good news for provinces such as Nghe An, Bac Ninh, and Phu Tho.

In Nghe An, China’s Goertek Group recently moved to increase its capital from $100 million to $500 million in a factory manufacturing electronic products, network equipment, and multimedia audio products to become the largest investor in the central province.

The first phase of the project is expected to be put into operation in June and create 5,000 jobs. For the next phase, Goertek has already increased investment by $400 million for high-tech manufacturing lines, which are expected to create 30,000 jobs.

Chairman of Nghe An People’s Committee Nguyen Duc Trung believed that the project would be a driving force to contribute to growth, economic restructuring, and creating jobs for local people while also luring more funding from abroad. “We have been innovating and making efforts to improve and ensure a competitive and safe investment climate to maintain the strategic collaboration between the province and investors, including Goertek,” said Trung.

On the same vein, Phu Tho is also an emerging province in capital attraction. South Korea’s JNTC electronic component manufacturing plant project adjusted its investment capital by an additional $163 million. Its project has been in operation for five years and the scale has been extended several times to manufacture more products like tempered glass for the display of cars, watches, and cover glass for cameras.

Meanwhile in Bac Ninh, South Korea’s GE Vietnam Services and Trade adjusted its investment by an extra $216.9 million.

In other localities, Bac Giang Industrial Zones Management Authority handed over new investment certificates for three projects with the total registered investment capital of $518.4 million, and 17 adjusted projects with $58 million in additional capital. And Dong Nai Industrial Zones Management Authority reported $70 million in January, including $1.2 million in newly-registered capital and $69 million in added capital.

According to the FIA, foreign-invested enterprises have been working well and expanding operations after last year’s tough battles. Thus, the disbursement last month increased by 6.8 per cent on-year.

“Both additionally-registered and share purchases have soared on-year both in the number of projects and total value. So we can see the trust of foreign-invested businesses in the investment climate of Vietnam,” said the FIA’s general director Do Nhat Hoang.

He also added that there is a lot of room to lure even more FDI. At present, Vietnam welcomes the investment or relocation of multinational corporations as well as local companies to deeply participate in global supply chains.

Nguyen Van Toan, vice chairman of the Vietnam Association of Foreign-Invested Enterprises believed that the nation is likely to attract as much as $40 billion of registered FDI this year.

“This can largely be put down to the signing of new-generation free trade agreements, continued economic recovery, and the reopening of international routes,” Toan said.