Localities get ready for fourth FDI boom

April 19, 2024 - 14:19
The shift in global production chains, especially in core technology, chip technology and future technology industries, is opening up many opportunities for Việt Nam to attract high-tech FDI capital.
A gas stove component production line of the Japanese-invested Paloma Vietnam Co Ltd in the Vietnam - Singapore Industrial Park in Hải Phòng City. — VNA/VNS Photo

HÀ NỘI — As the year 2024 is expected to witness the start of the fourth wave of foreign direct investment (FDI) to Việt Nam, localities nationwide are getting ready to absorb foreign capital flows.

The shift in global production chains, especially in core technology, chip technology and future technology industries, is opening up many opportunities for Việt Nam to attract high-tech FDI capital.

In the first quarter of 2024, Việt Nam registered US$6.17 billion of FDI capital poured in 17 out of 21 economic sectors, an increase of 13.4 per cent over the same period.

During a working session with Vietnamese Minister of Planning and Investment Nguyễn Chí Dũng in China late last month, Chinese Minister of Commerce Wang Wentao said that some Chinese production chains in textiles, household appliances and wooden furniture have moved to Việt Nam. Chinese investment in Việt Nam is increasing rapidly, particularly in the electronics sector. Many Chinese supporting businesses that supply products to major global electronics companies like Samsung and Apple have also set up factories in Việt Nam after surveying other competing countries.

As part of the shifting trend, Taiwanese Quanta Computer Inc Group – one of the largest computer manufacturers in the world, specialising in assembling MacBooks for Apple – decided to build its ninth computer factory in Mỹ Thuận industrial park in Việt Nam's northern province of Nam Định with a registered capital of US$120 million and a capacity of 4.5 million products per year in Phase 1.

Trần Anh Dũng, Vice Chairman of the Nam Định provincial People's Council said that to attract investors, the province has made preparations in all aspects from land funds for infrastructure development in industrial parks and economic zones, human resources, energy infrastructure and supporting industries to procedures. As a result, investment registration procedures for the project were completed within just 24 hours after receiving the dossier and only 15 days after the signing of the project development agreement. This shows the importance of a supportive eco-system in attracting investment.

Đỗ Nhất Hoàng, Director of the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment, said that a new wave of FDI is coming to Việt Nam. In the new southern policy of the Republic of Korea (RoK), Việt Nam is placed at the top position in attracting investment. Many MoUs between businesses of the two countries have been implemented since the official visit of the RoK President to Việt Nam in June 2023.

Hoàng affirmed that in this period, Việt Nam looks for investment in high technology, and new technology and says “No” to projects with outdated technology, environmental risks or labour-intensive ones.

The fourth FDI wave to Việt Nam is expected to bring US investment capital flows as many US business delegations are surveying the semiconductor chip ecosystem in Việt Nam. Many European business delegations are also surveying opportunities in Việt Nam with special attention to the country’s green growth strategy and its commitment to net-zero emission reduction by 2050.

Việt Nam has been concentrating on preparing clean land funds through infrastructure development in industrial parks, training high-quality human resources, developing new electricity sources, and logistic services and improving business climate, Hoàng said.

He added that in the past, it was difficult for FDI investors to meet provincial leaders and officials, but now top provincial leaders are willing to meet, discuss and support investors to solve their business problems.

To attract high-tech projects, economists recommended that the Government improve competitiveness by building an appropriate investment incentive policy framework, especially when Việt Nam started applying the global minimum tax regime on January 1, 2024.

In particular, Việt Nam needs to have policies to support domestic enterprises so that they can participate deeper in the supply and production chains of FDI enterprises, especially in the high technology segment. — VNS