Feature Article INVESTING IN VIETNAM 2
Director General Do Nhat Hoang, Foreign Investment Agency of Vietnam (FIA), explains how the nation’s economy has been restructured, the role Japan has played, and why the future looks even brighter still.
Director General of Foreign Investment Agency, Vietnam’s Ministry of Planning and Investment
Do Nhat Hoang
Vietnam’s GDP growth topped 8% last year. Could you please talk about Vietnam’s current economic situation and its future prospects?
Against the backdrop of a global economy facing difficulties and a slowdown in the regional economy, Vietnam has become a growth “bright spot” for the region and the world. It will work to curb inflation and continue to implement dynamic and flexible solutions for the development of infrastructure that will boost the connectivity of the economy. Vietnam will enhance its national competitiveness and also accelerate the process of restructuring the economy to one that is digital, circular, and knowledge based, as well as enhance internal capacity, autonomy, and self-reliance. The target for economic growth this year is 6–7%.
The FIA has been emphasizing the openness of Vietnam for business; would you tell us about the current wave of foreign direct investment (FDI), your measures to promote “high-quality FDI ,” and the Vietnam-Japan Joint Initiative (VJJI)?
In terms of the investment trend, major economic corporations and groups wanted to restructure their manufacturing production, and they wanted to restructure their supply chains. In that context, our reforms have attracted the attention of more and more foreign investors, and Vietnam is now in the top 20 countries in the world in terms of foreign investment.
Regarding high-quality investment, according to our strategy, we aim to be selective in approaching the opportunities before us. We set criteria such as quality, efficiency, and environmental protection. Accordingly, we lean toward high-tech electronics, renewable energy, biotechnology, and infrastructure projects that have high added value — specifically, projects related to semiconductor manufacturing and hydrogen.
We also plan to set up many R&D centers and want Vietnam to become an innovation hub, as well as to build a financial center to attract finance from all over the world.
To draw such investment projects, we need to continue to constantly review the relevant mechanisms, laws, policies, and investment conditions, and make appropriate adjustments so that our investment environment is more competitive and attractive.
Regarding VJJI, after 20 years of implementation, of the 594 subcategories of issues that have been addressed — including tax, tariffs, and labor laws — 84% have now been resolved.
2023 marks 50 years of Vietnam-Japan diplomatic relations. How do you see the current status and future outlook for these relations in terms of trade and investment, economic partnership agreements, movement of people, and deepening economic ties?
We have maintained a profound and expansive strategic partnership that contributes to peace in Asia. We deem this a partnership of trust. Building on this, we have cooperated in various fields, including politics, diplomacy, economics, and culture. Accordingly, we hope the Japanese side will continue its proactive promotion of trade and investment relations with Vietnam.
The determination to further strengthen the relationship will only bring benefits to both sides. The relationship is very complementary: Japan has technology, financial resources, and modern governance practices; we have human resources and a growing market. Japan has an aging population, while Vietnam has youthful demographics. Japan has advanced technology, while Vietnam has mid-level tech. There are many complementary areas.
Against the backdrop of a global shift to supply-chain diversification, a growing number of Japanese companies are establishing operations in Vietnam. Would you tell us about the impact of Japanese companies’ investments in Vietnam?
Many companies are looking at relocating their manufacturing operations, and Vietnam is one of the leading destinations. Japanese companies are no exception, and based on the strong existing bilateral relations, and the ongoing improvements in Vietnam’s investment environment, more are considering Vietnam.
Japanese companies were some of the earliest to invest in Vietnam, and they have made great contributions to the restructuring of the economy, including its modernization and industrialization. This has also led to the improvement of human resources, helping Vietnam access international markets and global supply chains. Japanese companies are also law abiding, and care both for their workers and about social issues, such as sustainable development.
Investment from Japan also contributes to bilateral and regional relations; Japanese people get to know more about Vietnam, which helps tourism, and there is also cultural exchange, such as the development of co-produced films. Many Vietnamese students and workers now visit Japan and come to understand Japanese culture.
What are your expectations for the role of the Japan Bank for International Cooperation (JBIC) in terms of Vietnam-Japan relations?
JBIC has been providing significant and effective support for companies and investors, and we hope it will continue to do so going forward in order to expand investment in Vietnam.
Do you have a message for Japanese companies planning to start doing business in Vietnam?
We have a great deal of trust in and appreciation for Japanese investors. We continue making efforts to improve the investment landscape so that they will have peace of mind about doing business in Vietnam. Please come to Vietnam. We are committed to being your partners.
