Vietnam an indispensable part of the global supply chain

Speaking at a conference in Quang Ninh province's Halong city on the government's action plan for the development and safeguarding of the Red River Delta on February 12, Nakajima Takeo declared that after overcoming the difficulties of the past three years, Vietnam was becoming an indispensable part of the global supply chain for Japanese manufacturers.

In December last year, JETRO conducted a survey of 3,100 businesses based in Japan and the results confirmed that Vietnam ranked fourth in the world in terms of favoured destinations for Japanese companies, ranking second only behind the United States in attracting foreign investment from Japan.

"This number is a testament to the great interest of Japanese businesses in Vietnam. It is impressive. Japanese businesses believe that Vietnam will develop strongly and be a destination for businesses and their partners," said Takeo.

Takeo went on to explain that in a survey of 600 Japanese companies in Vietnam, more than 60 per cent of respondents said that their company would expand their business in the next two years, a higher proportion compared to any other ASEAN country.

However, Takeo also emphasised some challenges that foreign investors in Vietnam are facing, such as the risk of inflation, workforce shortages, and infrastructure concerns.

"More and more Japanese businesses are interested in the Red River Delta region in their development plans for the next 5–10 years," he said. "For example, Sumitomo's smart city, the Thang Long Industrial Park expansion project; E-Rex's and JFE Engineering's biomass power project; the construction of the new power plant by LNG; the terminals from Marubeni and Tokyo Gas; along with Rorze's semiconductor expansion project. On top of these schemes, Yokowo Electronics is planning to build a semiconductor testing factory with cutting-edge technology in Hung Yen province. AEON Group will also expand its retail locations in the region,” he said.

“We have also witnessed some cooperation among Vietnamese startups and Japanese companies in the fields of healthcare, transportation, finance, retail, and education,” Takeo added.

He revealed that Japan's Recotech is working with Vietnam's Urenco and other companies on recycling plastic materials in the north of the country, while construction companies Chodai and Maeda will implement a project that treats medical and general waste in Quang Ninh.

Takeo added that these next-generation projects would bring advanced Japanese technologies to Vietnam, contributing sustainable value to the economy. “We are really pleased and realise that Vietnam is becoming a reliable business partner of Japan, South Korea, China, Europe, and the US,” he said.

The year 2023 marks the 50^th anniversary of diplomatic relations between Vietnam and Japan, and Takeo said that JETRO would continue to contribute to the development of Vietnam, especially in the Red River Delta region.

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Vietnam, Japan partner to develop startups, innovative companies A memorandum of understanding (MoU) on innovation cooperation has been signed, under which Japan will help Vietnam develop startups and innovative companies within the 8th phase of the Vietnam - Japan Joint Initiative.