Part of line 1 of the HCM City Metro urban railways system over the Saigon River in HCM City (Source: VNA)Hanoi (VNS/VNA) - Hong Kong iskeen on investing in infrastructure projects in Vietnam — a blessing given thecountry’s immense need for infrastructure financing to keep pace with its rapideconomic expansion.
In an exclusive interview with Viet NamNews, Vincent H S Lo, chairman of the Hong Kong Trade Development Council, saidVietnam is a very attractive destination for Hong Kong investment given itslarge population and rapid economic growth.
“Hong Kong is keen on investing ininfrastructure in Vietnam, especially now with the Belt and Road Initiative,”Vincent said. He said more trade will follow, including tourism and thenmanufacturing, once sufficient infrastructure is built.
Initiated by China in 2013, the “Belt andRoad Initiative” is an ambitious strategy to promote economic co-operationalong land and sea corridors spanning 65 countries throughout Asia, Europe andAfrica. The area’s massive demand for infrastructure is estimated at 1.7trillion USD a year through to 2030.
As a country participating in theinitiative, Vietnam, among the fastest-growing nations in the world, is alsoleading in the infrastructure race.
The country has targeted gross domesticproduct (GDP) growth of 6.7 percent in 2018 after recording a nine-year highwith GDP growth of 6.8 percent in 2017. It is boosting infrastructure to luremore foreign investment as well as keep its position as one of Asia’s next"Tiger" economies.
Vietnam has spent about 5-6 percent of GDPon infrastructure development in recent years, the highest in Southeast Asiaand comparable with China’s 6.8 percent, according to the Asian DevelopmentBank.
The sixth largest economy in the ASEAN blocneeds to invest an estimated 400 billion USD in infrastructure over the nextdecade. Given the huge financing gap, the country is endeavouring to attractnon-State, private and foreign resources into infrastructure projects,especially in the form of public-private partnerships (PPP).
“Infrastructure is typically very longterm, so you need to have stable transparency as well as provide incentives andguarantees for investors to make 20-30 year investments,” Vincent said.
He suggested the Vietnamese Government makefurther reforms on market conditions, offering incentives, especially taxincentives, guaranteed return and market opening to attract more foreigninvestment, just like China did 20 to 30 years ago.
Vincent said a few projects were plannedduring his visit to Vietnam last May but declined to disclose further as thecompanies have not announced it themselves.
“We will definitely continue to come to Vietnamand make further investments,” Vincent said.
In November, the South China Morning Postsaid Hong Kong companies have expressed interest in taking part in thedevelopment of subway projects in Ho Chi Minh City and Hanoi.
Stronger partnership
Bilateral trade partnership between Vietnamand Hong Kong has increased steadily in recent years.
Vietnam is Hong Kong’s ninth-largest tradepartner worldwide and biggest export market in ASEAN with two-way trade valuereaching 16.4 billion USD in the first eleven months of 2017, surpassing the2016’s total figure of 9.3 billion USD.
As of November 2017, Hong Kong’s annualimports from Vietnam touched 7.2 billion USD while its exports to Vietnam hit 9.2billion USD. Hong Kong has also been among top 10 biggest FDI investors in Vietnamwith total registered investment hitting nearly 18 billion USD.
In November last year, after three years ofnegotiations, ASEAN members and Hong Kong finally signed a Free Trade Agreement(FTA). Together with ASEAN-China FTA, economic cooperation between the twosides is expected to grow at a much faster pace.
“Hong Kong would like to be a springboardfor Vietnam but the country must make itself more attractive,” Vincent said,adding that many investors are looking for opportunities in Vietnam.
Hong Kong is an important entrepôt fortrade between mainland China and Vietnam, with 60 percent of re-exports ofgoods originating from the Chinese mainland. - VNA
VNA
