The Daily Yomiuri, which has a record circulation in Japan and the world, ran an article on October 30, saying that there is clearly a boom in investments from Japan to Vietnam before and after the later becomes an official member of the World Trade Organisation (WTO).
The Daily Yomiuri, which has a record circulation in
Japan and the world, ran an article on October 30, saying that there is clearly a boom in investments from Japan to Vietnam before and after the later becomes an official member of the World Trade Organisation (WTO).
Japanese and foreign enterprises are racing for investment in Vietnam, the paper said.
With a population of more than 83 million, Vietnam is a potential consumption market, therefore, Japanese enterprises are intensifying investments in Vietnam’s production system.
In addition, political stability and low salary level in Vietnam are factors for Japanese enterprises to increase investments and establish production groups to avoid risks arising from their concentrated investment in a certain area.
From 2000 to 2005, Vietnam registered an annual economic growth rate of more than 7 percent while its salary level was just half of China’s. So it was easy for foreign enterprises to moblilise industrious and intelligent human resources. Vietnam’s per capita income in 2005 was US$640, about 1/42 of Singapore’s but its consumption power among people was very big. The rate of TV access in Vietnam was estimated at approximately 75 percent but, according to Japanese TV makers, the figure would amount up to 90 percent. Meanwhile, the rate of using home appliances such as refrigerators and washing machines in Vietnam was barely 10-20 percent, leaving plenty of space for this industry to develop.
In 2005, Vietnam granted licenses to 107 projects undertaken by Japanese enterprises - the highest number so far. Most notable among them was a project to produce and assemble vehicles after Honda Vietnam had succeeded in producing motorbikes.
Honda Vietnam said the automobile sales figure in 2005 was just 35,000, but Vietnam will become a potential market in the next 10-20 years, even greater than Thailand.
A series of Japanese firms such as Panasonic and Sony are also expanding their operations or building new factories in Hanoi and Ho Chi Minh City. Last February, the US’ Intel group invested US$300 million in building a factory to produce semi-conductor parts in Ho Chi Minh City.
This shows that not only Japanese businesses but also US and European businesses are pushing up their investments in Vietnam.
Mr Machikawa, consultant of the Japan International Cooperation Agency (JICA) in Hanoi stressed that though total investment capital is not equal to the level before the Asian financial crisis, there is clearly a boom in investments from Japan and other countries to Vietnam.
(Source: VOV)
