Vietnam represents a bright candidate for value chain transformation

Satellite, oil and gas, renewable energy, agriculture, air transport, and urban railway projects in the country make up the fields that draw the attention of major French groups such as Total, ADP, Ingenierie, EGIS, NAVAL Group, Societe General, and SNCF.

Most notably, members from these groups raised plenty of questions to representatives of Vietnamese management agencies during an online seminar held to promote French investment attraction during the post-novel coronavirus (COVID-19) period.

According to the Foreign Investment Agency under the Ministry of Planning and Investment, the European nation represents the nation’s 15th largest investor out of 138 countries and territories, in addition to being the second largest EU investor with total registered capital of US$3.62 billion across 605 projects.

Whilst foreign investors have an interest in the Vietnamese market, French financiers are particularly keen on investing in the country due to its stable political environment, high and consistent economic growth, and low production costs. This is coupled with an abundance of human resources, strong demographics among the local population, deep international integration, open policies, along with competitive incentives and strategic positions.

Deputy Minister of Planning and Investment Tran Quoc Phuong believes that mutual ties are at their best stage of development since the two sides signed the Joint Declaration on Strategic Partnership in 2013. Indeed, Vietnam is only the second ASEAN country after Singapore, and the first developing country in Asia, to have signed a Free Trade Agreement and an Investment Protection Agreement with the EU, the EVFTA and EVIPA, respectively, therefore creating further opportunities for investors from both countries to make inroads into each other's markets.

Through an analysis on investment co-operation opportunities, Francois Corbin, chairman of the Vietnam - France Business Council, and vice president of the French Business Confederation (MEDEF), noted the country’s great location in the centre of ASEAN, an area that will be the most promising region in the world in the next few years. Recent years has seen the nation take steps to open up, coupled with reform in order to achieve encouraging growth rates. These efforts have contributed to the country maintaining a positive growth rate this year, despite the considerable negative impact of COVID-19 on economic activities.

These internal characteristics therefore make the country a bright candidate for value chain transformation in Asia, Corbin noted.

Ready to welcome shifting FDI inflows

With regard to attracting investment moving forward, Deputy Minister Phuong said that the attraction and co-operation of foreign and domestic investment will be done in a proactive and selective manner, taking into account quality, efficiency, technology, and environmental protection as part of the main evaluation criteria.

“Vietnam's foreign investment co-operation strategy in the coming period will give priority to projects relating to advanced technology, new technology, high technology, clean technology, modern governance with high added value, and connecting global production and supply chains”, emphasised Deputy Minister Phuong.

As a means of preparing for shifting FDI inflows, Do Nhat Hoang, director of the Foreign Investment Agency under the Ministry of Planning and Investment, said that recent changes have seen the Government amend the Law on Enterprises and the Law on Investment in order to speed up simplifying procedures and creating an open corridor. This is done to create favourable conditions for foreign financers to come to the nation for the purpose of investment and business co-operation.

In order to prepare for the coming wave of foreign investment, the nation is reviewing land funds at industrial parks, training human resources, developing an action plan, promoting supporting industries, and connecting with major FDI projects.

According to Deputy Minister Phuong, thanks to effective measures against the COVID-19 pandemic, the Vietnamese government has avoided possible disruption hitting the local economy.

During the course of the first six months of the year, Vietnamese GDP growth stood at 1.81% on-year, which is forecast to expand to 4.1% for the whole year and later rebound to 6.7% in 2021, the Deputy Minister noted.

Deputy Minister Phuong expects the country to remain as front-runners in terms of attracting a new wave of investment thanks to the country’s stable socio-economic-political environment, coupled with the Government’s strong efforts to perfect the legal framework and ensure that foreign investors can enjoy more convenience.