Vietnam’s success in containing Covid-19 and applying Investment Law, which was passed in January 2021, are expected to further attract foreign investment.
Disbursement of foreign direct investment (FDI) to Vietnam rose by 6.8% year-on-year in the first four months of this year to US$5.5 billion, a report of the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment has shown.
|Production of steel pipes at Son Ha company. Photo: Kinhtedothi|
Meanwhile, FDI commitments to the country slightly declined by 0.7% year-on-year to US$12.25 billion.
“While the foreign capital inflow into Vietnam has not been as high as in previous years, those figures remain positive at a time of difficult economic environment as a result of the Covid-19 pandemic,” ADB’s Chief Economist Nguyen Minh Cuong told Hanoitimes .
“This showed the confidence and trust from foreign investors to Vietnam’s economic outlook and the government’s effective measures against the pandemic,” said Cuong.
Cuong expected increased investment will be a key growth driver for Vietnam this year and next.
“Vietnam’s success in containing Covid-19 and the Investment Law, passed in January 2021, to streamline business regulations are expected to further attract foreign investment,” he added.
Year to April 20, 451 new projects have been approved with total registered capital of US$8.5 billion, down 54.2% in the number of projects but up 24.7% in capital year-on-year, while 263 existing projects have been injected an additional US$2.7 billion, down 21.5% in number and 10.6% in capital.
During this period, 1,151 projects had nearly US$1 billion in capital contributed by foreign investors, down 64.1% in number of projects and 57.8% in value year-on-year.
Investors have poured money into 17 fields and sectors, in which manufacturing and processing led the pack with investment capital of nearly US$5.2 billion, accounting for 42.4% of total registered capital. Electricity production and distribution came second with US$5.1 billion, or 41.3%, followed by real estate with US$778 million.
FIA’s report added that out of 67 countries and territories having projects in Vietnam in the first four months of the year, Singapore took the lead with US$4.8 billion, or 39.6% of the total registered FDI for new projects, followed by Japan with US$2.5 billion, or 20.5% and South Korea with US$1.5 billion, or 12.1%.
Among 53 cities and provinces having received FDI in the January-April period, the southern province Long An has attracted the largest portion of capital commitments with US$3.3 billion, or 26.9% of the total. The southern city of Cantho came second with nearly US$1.3 billion (10.7%), followed by Ho Chi Minh City with US$1.1 billion (9.3%).
Big-ticket projects in January-April include the Long An liquefied natural gas (LNG) power plant project worth US$3.1 billion from Singaporean investors; US$1.31-billion O Mon II thermal power plant from Japanese investors; an additional injection worth US$750 million into LG Display Haiphong from South Korean investors; a tire manufacturing plant in the southern province of Tay Ninh with additional fund of US$312 million; and Kodi New Material Vietnam manufacturing plan from Singaporean investor worth US$270 million to make tablets and laptops in the northern province of Bac Giang.