The foreign direct investment (FDI) inflow into Vietnam has fallen significantly due to the global economic woes, but it is not a matter of concern yet, said the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment.
The country has attracted nearly US$6.4 billion of newly-registered and additional FDI capital in the year to date, down 27.3% year-on-year, whereas the Government aims to lure US$15-17 billion of fresh FDI for the whole this year.
However, FIA director Do Nhat Hoang said: “To achieve the target of raising FDI quality, we must accept registered capital decline in a short term. The more important things are disbursed capital volume and investment structure.”
Some US$840 million of FDI capital has been disbursed this month, taking the total amount of disbursed capital in Jan-Jun to US$5.4 billion, picking up 2% over the same period last year, show the data recently announced by FIA.
The foreign investment promotion agency said FDI disbursement was very stable since the year’s beginning and if this tempo continued, the disbursement target of US$10-11 billion for this year would be obtainable.
In the structure of FDI investment, manufacturing and agro-aqua-forestry occupy larger portions while service and real estate tend to fall.
Japan is the biggest investor with U$4.1 billion, or 65% of the FDI inflow into Vietnam in the first six months.
Yoshida Sakae, managing director of the Japan External Trade Organization (Jetro) in HCMC, said Japanese small and medium businesses tended to shift their production abroad given yen appreciation against the U.S. dollar and euro, making its costlier to operate in their home country.
As Japanese investors seek ways to boost their investment overseas, Binh Duong and Dong Nai become potential destinations, said Hoang of FIA. The Japanese-invested Tokyu Binh Duong Garden City project worth a hefty US$1.2 billion is the largest project licensed in the year’s first half.
In addition to direct investment, Japanese firms also make stronger presence in Vietnam through a surging volume of merger and acquisition deals.
The Saigon Times Daily