According to the Foreign Investment Agency (FIA), under the Ministry of Planning and Investment (MPI), close to $1.7 billion worth of foreign capital poured into Vietnam last month. While this figure was down 19.8 per cent on-year, partly due to the timing of the Lunar New Year, January still saw positive signs. Some 153 new foreign-invested projects, valued at $1.2 billion, were granted licences, up 48.5 per cent in number and 3.1 times in value compared to the same period last year.

“We can consider this a signal confirming the confidence of overseas financiers to expand their interests in Vietnam,” said Do Nhat Hoang, director of the FIA.

This confidence is also reflected in the amount of new projects that were granted investment registration certificates or signed an MoU in the first month of the year. Bac Giang People’s Committee have granted several investment certificates and MoUs for a number of internationally funded projects with total registered capital of about $861 million.

One such group is Singapore’s Ingrasys Ltd., partnering with Fulian Co., Ltd., for a precision technology factory. Another is China’s Hainan Longi Green Energy Technology, who are set to manufacture solar panels with a capacity of 3,500 MW per year.

Also last month, Chinese electric vehicle manufacturer Yadea Group announced they would build a 23.3 hectare factory to manufacture and assemble electric motorcycles in Tan Hung Industrial Park in Bac Giang, starting from the second quarter of this year.

Based on the potential of the market and upcoming projects currently under or preparing MoUs, the FIA forecasts that Vietnam is likely to attract $36-38 billion of foreign direct investment (FDI) in 2023, up 30-37 per cent on-year.

The reopening of China's economy is also expected to have a positive impact on attracting FDI to Vietnam later this year. FIA deputy director Do Van Su said, "The withdrawal of capital from China by South Korean, Japanese, and Taiwanese speculators will accelerate after China reopens its economy."

Alongside the aforementioned opportunities, Vietnam also faces many challenges in attracting FDI this year. In a report on the socioeconomic situation at the government's regular meeting last month, a representative of the MPI explained that the tightening of monetary and fiscal policies, as well as risks posed by a global slowdown, have dampened sentiment. Rising interest rates and a strong appreciation of USD have also led to an increase in the cost of financing.