Vietnam becomes global production centre thanks to boom of foreign investment

Illustrative image (Photo: Dau tu (Investment) newspaper)

Hanoi (VNA) - Despite impacts caused by the COVID-19pandemic, foreign direct investment (FDI) is still being poured intoVietnam, contributing importantly to turning the country into a new productionhub of the world.

Registeredcapital, disbursement boom

Over the past five years, since Vietnam reviewed its 30-yearforeign investment attraction, the FDI flow into the nation has not ceasedincreasing.

Statistics from the Ministry of Planning and Investment (MPI)show that from January 2018 to April 20, 2023, the registered FDI in Vietnamtotaled 180 billion USD, equaling 40.3% of the accumulated investment capital overthe last 35 years.

As of April 2023, Vietnam had attracted 37,065 foreign-investedprojects with a total registered capital of 445.87 billion USD, with 279.8billion USD of the total being disbursed.

HSBC, in its report on attracting foreign investment inASEAN in the middle of last year, highlighted a boom in foreign investment intoASEAN, saying that Vietnam and ASEAN are the two markets receiving the most of foreign investment capital.

Over the last five years, the total FDI disbursement hit 107.47billion USD, equaling 38.4% of the total disbursed capital over the past 35years. About 19-20 billion USD of FDI isaveragely disbursed every year during the reviewed period. A record of FDI disbursementwas set in 2022 with 22.4 billion USD.

The quality of foreign investment into Vietnam hasalso improved significantly.

Becoming new production centre

According to Minister of Planning and Investment Nguyen ChiDung, more and more multinationals and big investors have continuouslyinvested in Vietnam.

More and more multinationals and big investors have continuously invested in Vietnam. - Illustrative image (Photo: VNA)

Economists said that the foreign-invested economic sectorhas made an important contribution to the added value of industrial productsthanks to international economic groups' investment in many large-scaleprojects which use high technology, and modern services.

Dozens of research and development (R&D) centres, innovationhubs, and technology incubators have been established, making it easier for domesticfirms, especially small- and medium-sized enterprises, to connectwith foreign businesses, they noted.

When it comes to success economic stories driven by foreign investment, Vietnamis a prominent example, HSBC said, highlighting that Vietnam turneditself into a rising star in global supply chains, gaining substantial globalmarket share in such sectors as textiles, footwear and consumer electronics.

The bank also mentioned large-scale investments of Samsung,Pegatron, Foxconn, Luxshare, and Goertek, stressing that Vietnam is transforming itself into the world's technology factory.

Not long ago, Quanta Computer of Taiwan (China) signed anagreement with the People's Committee of the northern province of Nam Dinh on developinga large-scale computer production project in My Thuan Industrial Park, which isexpected to have an investment capital of 120 million USD. This is Quanta's 9thfactory globally and the first in Vietnam.

Quanta is a MacBook manufacturing partner of Apple, so theappearance of this corporation in Vietnam means that Apple is continuing to shiftits production to the Southeast Asian nation.

Foxconn, another partner of Apple, is also planning to setup a new factory in the central province of Nghe An, to expand its production inVietnam after it successfully invested in the northern provinces of Bac Ninhand Bac Giang.

Samsung is a good example of the foreign investment scale inVietnam. So far, the group’s totalinvestment in the country has hit 20 billion USD.

Meanwhile, LG’s investment in Vietnam totaled 7.5 billionUSD in the last five years. The group has continuously added capital to its factories- LG Display, LG Innotek, and LG Electronics.

Foxconn, Pegatron, Winston, Goertek, and Amkor have continuouslyincreased their investment capital in Vietnam, including billions-USD commitments.

According to Christopher J Marriott, CEO of SavillsSoutheast Asia, Vietnam is considered one of the prominent destinations for high-valueindustries with production capacity that meets the expectation of internationalinvestors and technology corporations.

Last year also marked another important turning point when LegoGroup of Denmark officially started construction of a project worth over 1.3billion USD in Vietnam. Given that Vietnam has committed to cutting emissions to net zero by 2050, Lego'sfirst global carbon-neutral project is seen as a start of green investment inthe Southeast Asian nation./.

VNA