KTFA: Vietnam
Henig: FDI disbursement exceeds US$20 billion
06:00 | 01/01/2023
(VEN) – Foreign direct investment (FDI) disbursement reached more than US$20 billion in 2022 – the highest level in five years, aiding post-pandemic recovery.
Renewed trust
In the first 11 months of 2022, FDI disbursement reached US$19.7 billion, up 15.1 percent year-on-year. Economists forecast the sum would exceed US$20 billion or even reach US$21-22 billion by year’s end.
Nguyen Van Toan, Vice President of the Vietnam Association of Foreign Invested Enterprises, said the 11-month FDI disbursement result was impressive, especially in the context of a slowdown in registered capital.
“In my opinion, FDI disbursement is important, and FDI can contribute to the Vietnamese economy only when it is disbursed,” Toan emphasized.
Dr. Nguyen Quoc Viet, Deputy Director of the Vietnam Institute for Economic and Policy Research (VEPR) under the University of Economics and Business, Vietnam National University, Hanoi, affirmed that FDI disbursement contributed significantly to Vietnam’s economic growth in 2022.
According to Nguyen Thi Huong, Director General of the General Statistics Office of Vietnam under the Ministry of Planning and Investment, the new record of FDI disbursement shows foreign investors’ increased trust in the Vietnamese investment and business environment and their willingness to expand operations in the country.
Orientations for 2023
Despite the record set in 2022, economists believe there is still much room for Vietnam to attract additional FDI and use it more effectively to promote economic growth in 2023 and ensuing years.
Dau Anh Tuan, Director of the Legislation Department of the Vietnam Chamber of Commerce and Industry (VCCI), said that 35 years since Vietnam promulgated its Law on Foreign Investment in 1987, the country has become an attractive destination for foreign investors. In 1991, the amounts of FDI registered and disbursed in Vietnam were US$1.28 billion and US$428.5 million, respectively. In 2021, these increased respectively by 30 times and 38 times, despite the heavy impacts of the COVID-19 pandemic.
FDI companies are an important part of the Vietnamese economy, contributing about 72 percent to Vietnam’s export value, helping maintain the country’s trade surplus in recent years.
However, Vietnam has faced some problems related to FDI, such as transfer pricing and tax evasions, with some FDI companies yet to abide seriously by Vietnam’s environmental regulations.
To attract quality FDI projects in 2023 and ensuing years, VCCI recently introduced a set of tools for screening FDI projects in Vietnam. The tools include assessment of investment based on factors such as employment generation, technology transfer, infrastructure development, linkages with local businesses, labor conditions, and environmental impact. The screening tools are expected to help improve the quality and effectiveness of FDI.
Vietnam is becoming more selective in attracting FDI projects to ensure their positive contributions to its economic growth.
Chu Huynh LINK
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Vietnam: The construction industry’s growth rate surpasses set plan
December, 31/2022
Timely control of the real estate market is one of the recognised successes in the State management of the Ministry of Construction.
HÀ NỘI — Despite being affected by general difficulties, the growth rate of the construction industry achieved about 8-8.5 per cent this year, contributing to bringing the economy’s overall growth rate surpassing the 6-6.5 per cent plan set by the Government.
Timely control of the real estate market is one of the recognised successes in the State management of the Ministry of Construction.
The Ministry of Construction has comprehensively assessed the market to point out the shortcomings and propose solutions to ensure the real estate market’s safe, healthy and sustainable development.
The Minister of Construction Nguyễn Thanh Nghị has worked immediately with several localities such as Hà Nội, HCM City, Đà Nẵng, Cần Thơ, Hải Phòng and real estate businesses to review, urge and guide to remove difficulties and obstacles in project implementation.
Along with regularly monitoring market developments, the Ministry of Construction proactively informs, forecasts and promptly takes measures to respond to abnormal market fluctuations, and promptly handles “hot” issues.
Typically, it has reported to the Prime Minister and the Standing Committee of the National Assembly’s Economic Committee on the impact of the unusually-high land use right auction winning results on the real estate market; proposed several solutions related to the amendment of policies and laws on auction and strengthen the management, inspection and handling of violations in the auction of land use rights in the localities.
In addition, the ministry coordinated with the State Bank of Việt Nam to assess the situation and evolution of capital flows into the real estate market and propose appropriate solutions.
The real estate market has shown signs of recovery and development, with the total number of transactions of apartments, individual houses and land plots higher than last year.
The product absorption rate in most segments is high, and the rate of office vacancy and commercial space for rent gradually decreased.
The market has re-balanced between investment and business activities, and buying and selling for use. However, the market still faces a supply shortage in all product segments, an inappropriate structure of goods, a severe lack of affordable social and commercial housing, and high transaction prices.
Real estate supply is limited in all segments. Transaction prices in many segments remained at a high level at the end of the second quarter of this year, affecting the liquidity and trading volume of the market, especially the secondary market.
To “take the reins” of the real estate market, Minister Nguyễn Thanh Nghị requested to review and reduce procedures in the direction of reform to “open up” investment activities but still ensure compliance with legal regulations.
The minister asked to continue to study and develop mechanisms, policies and solutions to encourage and attract foreign investment into the real estate market in the coming time, overcome the supply-demand mismatch of real estate products, focus on promoting the development of real estate products to meet the significant needs of the society such as social housing, commercial housing at reasonable prices.
At the same time, he also noted to complete and regularly maintain information systems and databases on the housing and real estate market; regularly follows the real estate market situation to adjust and promptly remove difficulties caused by limitations and inadequacies of mechanisms, policies, laws; natural disasters; impacts of the COVID-19 pandemic on real estate market; to ensure the stable and healthy development of the market.
These “supports” were the leverage to help the construction industry complete the year’s tasks and proactively identify the new year’s challenges to maintain a sustainable growth rate, said Nghị. — VNS
Henig: Expanded trade opportunities with US
06:00 | 31/12/2022
(VEN) – US companies are seeking new suppliers to minimize risks in supply chains, creating more opportunities for Vietnamese businesses in the post-pandemic era. However, the opportunities also face challenges.
Largest export market
“Vietnam considers the US one of the most important partners. Since upgrading bilateral relations to a comprehensive partnership in 2013, the two countries have deepened cooperation, focusing on trade and investment. The business communities of the two countries have played a very important role in this process,” said Deputy Minister of Industry and Trade Do Thang Hai at a recent Vietnam-US trade forum jointly held by the Ministry of Industry and Trade, the US Chamber of Commerce in Vietnam, and the US-ASEAN Business Council.
According to Deputy Minister Hai, bilateral trade between Vietnam and the US grew from US$450 million in 1995 to nearly US$113 billion in 2021, despite supply chain disruptions caused by the COVID-19 pandemic. The US has become Vietnam’s second largest trading partner, with annual bilateral trade exceeding US$100 billion. The US has been Vietnam’s largest and most important export market for many years, while Vietnam has become the eighth largest trading partner of the US.
“The US is also one of the largest foreign investors in Vietnam, with nearly 1,150 projects currently operating with total registered capital of more than US$10.3 billion, ranking 11th among 141 economies investing in Vietnam,” Deputy Minister Hai said.
Trade defense measures
However, Vietnam has faced challenges in trade with the US, including the increased frequency of US trade defense investigations of Vietnamese goods. Moreover, the US has not recognized Vietnam as a market-driven economy.
Phan Thi Thang, Vice Chair of the Ho Chi Minh City People’s Committee, proposed that the US assist the city in a prefeasibility study for the establishment of an export goods irradiation center and provide technical assistance for Mekong Delta cities and provinces to ensure the quality of farm produce exports to the US.
Thang also expressed the wish for increased cooperation between Ho Chi Minh City and the US in the fields of logistics, digital economy, sharing economy, circular economy, smart city development, and building international financial centers.
According to Michael Vu Nguyen, Country Director of Boeing Vietnam, US companies are seeking new suppliers to minimize risks in supply chains, creating more opportunities for Vietnamese businesses.
Chung Seck, Vice Chair of Amcham Vietnam Digital Economy Committee, said to attract more US investment, the Vietnamese government should adopt a secure legal framework for safe cross-border data transfer and pay attention to intellectual property in the digital business environment.
Within the framework of the Vietnam-US Trade Forum 2022, Deputy Minister of Industry and Trade Do Thang Hai and Oregon State officials signed a memorandum of understanding to facilitate trade exchange and investment in the industry and energy fields.
Ngoc Thao LINK
