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COVER STORY

venture Hitachi Sunway Information System, SELECTED KEY TECH FDI PLANS IN VIETNAM
one of the leading one-stop ICT solutions and Year Company Origin Product Amount (USDm)
services providers in Southeast Asia, posted 2H19-20 Intel US 5G products and 475
the leading business performance last year core processors
among all group members as well as higher 2020 Pengatron Taiwan Computing, communication 1,000
growth than planned. “We have more and and consumer electronics
better business opportunities than in other
regional countries thanks to the government’s 2020 Foxconn Taiwan Laptops and tablets 270
quick response to Covid-19,” said Mr. Nguyen 2021 Hayward Quartz US Semiconductor materials 110
Hoang Hiep, Country Manager of HSV. Technology
The opportunities are also on account of Source: Nikkei, Reuters, Vietnam News, HSBC
the business environment and the government’s
investment policies. “This is a key point behind
our willingness to invest in Vietnam,” he went
on. “The Hitachi Corporation now runs seven workforce, along with developing infrastruc- investors look for,” said Mr. Le Duy Binh,
companies in Vietnam in different business ture in key areas to meet the needs of foreign Managing Director of Economica Vietnam.
fields, from manufacturing to trade and serv- investors,” he went on. “While Vietnam has “Its ability to fight the pandemic compared
ices. This expresses its appreciation of Viet- always been appealing among foreign to its competitors made investors view it as a
nam’s investment environment and is funda- investors, it is now even more so given what stable market that is able to maintain pro-
mental in us expanding in the region.” is happening globally. The consequences of duction and exports even in difficult times.
the US-China trade war and the pandemic This is proven by the fact that most manu-
have accelerated the process of foreign facturers in the country and FIEs in particular
Self-positioning
The world’s leading corporations have eval- investors transiting out of China to avoid managed to keep production going last year
uated Southeast Asia as being the best region overly punitive taxes and expand their pro- and contribute to global value chains.”
to shift manufacturing from elsewhere, with duction scale in Vietnam as they seek to Nonetheless, foreign investors have cer-
three countries regularly in discussions because reduce dependence on any one country.” tainly faced some difficulties while operating
of their factory relocation strategies: Vietnam, Moreover, its competitive advantages give in Vietnam. Mr. Hiep from HSV emphasized
Indonesia, and Myanmar, according to Mr. Vietnam the potential to advance to the next the need to improve workplace skills in order
Hiep. Of these, he said, Vietnam possesses the level in global value chains. Mr. Marko Walde, to match technological advancements in the

most advantages in terms of workforce, friendly Chief Representative of the Delegation of age of Industry 4.0 and the national digital

investment environment and preferential poli- German Industry and Commerce in Vietnam transformation strategy. Mr. Yoichi from
cies, and its ability to cope with the pandemic. (AHK), said many German enterprises have Panasonic suggested improvements are

For these reasons, the country has joined global plans to expand from China to Vietnam. needed to logistics, infrastructure, and sup-
value chains and become a destination of choice “They will complement their existing Chinese porting industries. “Vietnam needs to boost
for international investors. operations with new activities in Vietnam transparency and speed up business travel
Panasonic also views Vietnam as a strategic regarding sourcing and investments,” he said. and visa applications, support R&D expan-
market in the Asia-Pacific and will establish “This trend started before the ‘trade conflict’, sions with things like tax incentives, develop
two research and development (R&D) centers as German investors in China were looking its human resources, especially in manu-
to support its manufacturing and business to diversify their operations by adding another facturing and engineering, and conduct
development in the region, to serve both the location in Asia. Reasons for coming to Viet- administrative reform in line with global
global and ASEAN markets. “Vietnam has a nam include diversification strategies, the standards,” he said. 2
resilient economy with outstanding economic reliability of Vietnamese partners, and rising As there is a clear trend to move global
growth, an open investment environment, labor costs in China.” supply chains to Vietnam, it’s important that
S

political stability, a strategic geographic loca- the country reaps all the benefits on offer.
tion, and competitive labor costs, which taken Seeking more opportunities “Movement is being primarily seen in sup-
together distinguish it from its peers,” Mr. FDI is likely to continue to enter Vietnam porting industries, especially production
Yoichi said. as long as the government continues to control assembly, as Vietnam is not yet able to welcome
The relocations by leading manufacturers the pandemic. Dr. Vu Tien Loc, Chairman of FDI in fields such as R&D and distribution,”
and tech giants are expected to benefit Vietnam the Vietnam Chamber of Commerce and Dr. Loc believes.
significantly, according to Mr. David Jackson, Industry (VCCI), believes Asia will remain He also noted that Vietnam’s assembly
CEO of real estate consultants Colliers Inter- the world’s production plant, noting that industry is under-developed, so it needs to
national in Vietnam. “The increased presence China, Vietnam, and certain other ASEAN attract further FDI, followed by R&D and other
of large electronic manufacturers in Vietnam countries are favored locations. Vietnam holds higher added-value activities in the supply
will help create many jobs, increase exports, the most advantages, thanks to the China+1 chain. “To reach this target, the government
and improve Vietnam’s electronics supply strategy adopted by many companies. “The must build a more friendly, transparent, and
chain,” he said. “Expansions by companies shift in production to Vietnam has begun and straightforward investment process, create
like Foxconn and Samsung increase the pos- will continue into the future,” he said. ideal locations, not only in infrastructure but
sibility of a wave of hi-tech projects entering Foreign investors generally select their also in production and services ecosystems,
Vietnam in the year to come.” investment destination based on local con- and train the workforce,” he added. “These
Vietnam therefore stands to benefit greatly ditions, whether it is a safe and convenient are crucial requirements for the country to
from skills and knowledge transfer from market that is bankable, and if it will be ben- welcome more FDI into supporting industries.
abroad and improvements to the competi- eficial to the development of the local and But it should also start selecting investment
tiveness of its human capital. “This is in line global economies. “Vietnam proved its prof- projects with higher added-value, because
with the government’s vision and plan to itability and political and economic stability there is no space to just continue attracting
improve the education and skill levels of the last year, which are the main conditions FDI in assembly projects.” %
APRIL 2021 | VIETNAM ECONOMIC TIMES | 23