A view of Tan Cang Hai Phong International Container Terminal, Hai Phong City. (Photo: VNA)The trade deal has opened uphuge opportunities for Vietnam to attract investment from the UK in thesectors of the UK’s strength, such as green finance, renewable energy, hi-techmanufacturing, digital transformation, healthcare, education and climate changeadaptation.
Those are prioritised sectorsin attracting FDI of Vietnam as the country is striving to build a digitaleconomy and promote green growth.
The latest updates showed thatthe UK was the 15th largest investor out of 139 countries and territoriespouring capital into Vietnam, with total investment worth nearly 4.2 billion USDas of August 20, accounting for around 1% of the total FDI value into thecountry.
In August alone, the UKinvested in 25 new projects, bringing the total number of projects with UKinvestment to 478.
The existing investment fromthe UK was mainly poured into the manufacturing and processing industry, realestate business and mining. With the UKVFTA, there is significant room for Vietnamto attract investment from the UK in renewable energy and hi-tech manufacturingas well as digital transformation.
Vietnam committed at the 2021United National Climate Change Conference (COP26) to achieve net zero emissionsby 2050. Under the national strategy for green growth by 2030, the Governmentset the goal of greening economic sectors through the conversion of growthmodels and promoting the circular economy model through the efficient use ofenergy and resources based on the application of science and technology anddigital transformation.
The Southeast Asian country’sFDI attraction policies are also switching to attract quality FDI which helps integratedomestic firms into worldwide supply chain networks.
Chris Milliken, vicepresident of the British Chamber of Commerce in Vietnam, at a workshop inJune, said that he highly appreciates Vietnam’s commitment to bringing netemissions to zero by 2050.
To achieve this goal, Vietnamis currently quite open to receiving technological solutions to develop itsrenewable energy foundation, he said, adding that this is the area that the UKhas an advantage in, especially renewable energy and energy saving.
According to the MultilateralTrade Policy Department under the Ministry of Industry and Trade, the UKVFTAgave Vietnam the opportunity to cooperate with the UK in a number of importantfields including industry and energy.
The department pointed outthat the UK is a country with strengths in pharmaceuticals, high-techindustries, and energy saving, adding that Vietnamese enterprises have greatopportunities to enhance investment cooperation with and promote technologytransfer from the UK.
Taking advantage of theUKVFTA, Vietnamese businesses also have the chance to participate in the UK’sindustrial and energy supply chain as well as export industrial products to theUK.
According to the department,to integrate with the UK’s supply chain network, Vietnamese enterprises mustpay attention to technical requirements and food hygiene and safety standardsof the UK to prepare carefully in terms of business plans and productdevelopment.
In addition, enterprises alsoneed to pay attention to regulations related to sustainable development such aslabour and environment because the UK is very interested in those issues, thedepartment said.
Under the UKVFTA, Vietnam hascommitted to higher standards of treatment for UK service suppliers andinvestors than those are currently applied for other foreign service providersand investors under its WTO commitments. Many of these commitments lower marketentrance requirements or enlarge the scope of activities for UK servicessuppliers and investors than before.
Accelerate reforms
Vietnam’s drastic effort inimproving the business environment in recent years has made the country anattractive and safe investment destination in the context that multinationalcorporations are seeking to diversify and optimise their supply chains afterthe COVID-19 pandemic.
The UKVFTA not only provides apush for trade and investment cooperation but also acts as a catalyst toaccelerate institutional reforms and improve the business climate in Vietnam,economist Vo Tri Thanh said.
The trade deal contributedsignificantly to creating a favourable business environment to attract qualityFDI and establish supply chains, he added.
Vietnam climbed 34 places torank 70th in the World Bank’s Ease of Doing Business Rankings from 2007 to 2020.
In the race to attract qualityFDI and take advantage of the UKVFTA and other trade deals in which Vietnam isa member country, further efforts to improve the business climate, improve theFDI policies and legal framework were required, according to the Vietnam ForeignInvestment Agency.
In addition, it is necessaryto actively enhance trade promotion activities in the UK to introduce thecountry and the people together with advantages and opportunities wheninvesting in Vietnam.
The UK investors should beencouraged to invest in sectors of their strengths, including pharmaceuticals,technologies, aviation and renewable energy, the agency said./.
VNA
