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Vietnam’s position in the electricity and electronics supply chain is increasingly consolidated. (Photo: Vietnam+)
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On July 11, the Ministry of Planning and Investment informed that in the context of the global supply chain restructuring, foreign investors continue to consider Vietnam as an important investment destination in the medium and long term.
Improving project quality
In the first six months, Vietnam attracted nearly $15.2 billion in registered foreign direct investment (FDI), up 13% compared to the same period in 2023. Along with that, the realized capital is estimated at $10.8 billion, up 8% over the same period.
As of June 20, the country had 40,544 valid foreign investment projects with a total registered capital of $484.8 billion. The cumulative realized capital of foreign investment projects is estimated at about $308 billion, or 63.5% of the total valid registered investment capital.
According to the Ministry of Planning and Investment, the increase in both registered and realized FDI will further boost domestic activities. Specifically, the quality of investment projects has improved significantly. Many large-scale projects in the fields of semiconductors, energy (manufacturing batteries, photovoltaic cells, silicon bars), production of components, electronic products, and value-added products have been invested in and expanded.
FDI capital is concentrated in provinces and cities with many advantages in attracting foreign investment (good infrastructure, stable workforce, efforts to reform administrative procedures, and dynamism in investment promotion), such as Bac Ninh, Ba Ria-Vung Tau, Quang Ninh, Hanoi, Hai Phong, Ho Chi Minh City, and Dong Nai. And, the capital still comes mainly from Vietnam’s traditional partners in Asia, such as Singapore, Japan, Hong Kong, South Korea, and China…
Maintaining a stable pace
According to the Ministry of Planning and Investment, the global economic outlook for 2024 is forecast to recover weakly and will face many risks and challenges. The complex developments after the COVID-19 period, along with geopolitical instability and competition among major countries, continue to bring changes that affect the global economy in the medium and long term.
On this basis, new standards and even intervention measures by some governments to orient investment activities may affect FDI trends. Foreign direct investment flows are increasing slowly and are becoming more concentrated among countries with geopolitical links, especially in strategic areas.
However, many domestic and foreign financial institutions forecast that Vietnam’s FDI attraction prospects this year will maintain a positive pace thanks to three core factors, including its important and increasingly consolidated role in the diversification strategy of multinational manufacturers’ supply chains; Vietnam’s economic growth is recovering positively this year; and stable macroeconomy.
Specifically, the Ministry of Planning and Investment pointed out that Vietnam has investment prospects in many pioneering industries. The technology industry is undergoing many innovations and digitalization. Similarly, the renewable energy sector is attracting attention with a growing focus on clean energy sources (such as solar and wind power) to enhance the sustainability of Vietnam’s electricity supply.
Another highlight mentioned by the Ministry of Planning and Investment is that investors’ confidence in Vietnam continues to be strengthened. Existing investors have expressed their trust in the government’s policies and the future development of Vietnam’s economy. Furthermore, many investors consider Vietnam an attractive, potential, and promising destination in the medium and long term.
Common assessments from domestic and international organizations are that Vietnam’s position in the electricity and electronics supply chain is increasingly consolidated, so there is a tendency for many corporations producing electronic products to come to Vietnam.
Along with these advantages, the Ministry of Planning and Investment emphasized that Vietnam must actively overcome some current bottlenecks. Specifically, it is necessary to urgently prepare skilled human resources, especially in the field of electronic semiconductors; overcome local power shortages in some localities with many electronic industrial projects; and review procedures to simplify and shorten processing time, especially post-investment license procedures such as construction permits and fire protection and prevention permits…
Based on these comprehensive assessments, the Ministry of Planning and Investment emphasized that the Government and the Prime Minister have directed that in the future, all levels and sectors focus on resolute solutions to address these bottlenecks. Accordingly, the Ministry of Planning and Investment believes that there will be positive impacts on foreign investment attraction results in the last six months of 2024, continuing to maintain a positive growth rate, reaching a level equivalent to or higher than in 2023.
Hanh Nguyen
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