Attracting FDI before a historical turning point

With the promotion of the fourth industrial revolution, a new wave of foreign investment is landing in Vietnam, bringing new development opportunities so that businesses and the country’s economy can take off and fly high with other countries. “eagle”, contributing to realizing the aspiration of becoming a prosperous country.

Delegates visit the booth at Vietnam Goods Week at Aeon Japan. (Photo HA MY)

In that journey, opportunities are very open but also pose many challenges, requiring Vietnam to act quickly and drastically to keep up with the rapidly changing context of the world economy.

Lesson 1: Sweet fruits from economic diplomacy

Attracting FDI before the turning point in history photo 1

The Foreign Investment Law promulgated in 1987 opened up opportunities for Vietnam to attract foreign capital to promote industrialization, modernization and development towards building an open economy, integrating with the region and the world. international.

Along with specialized laws on investment attraction, the signing and implementation of free trade agreements (FTAs) also make a significant contribution, creating conditions for foreign capital to flow increasingly strongly into Vietnam.

On January 11, 2007, Vietnam officially became the 150th member of the World Trade Organization (WTO), marking the country’s comprehensive integration into the journey of innovation and international integration. To date, Vietnam has signed and implemented 16 FTAs, opening up great opportunities for trade activities as well as attracting foreign direct investment (FDI).

Ideal destination in the eyes of investors

Ms. Phi Thi Huong Nga, Director of Industrial Statistics (General Statistics Office) said that Vietnam has currently signed FTAs with all major economic partners globally such as Japan, China, the US, and the Union. Europe (EU), Russia,…

Prominent are the new generation FTAs, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Vietnam-European Union Free Trade Agreement (EVFTA), the Free Trade Agreement by Vietnam-United Kingdom and Northern Ireland (UKVFTA), creating favorable conditions for foreign investors to come to Vietnam.

Data from the Ministry of Industry and Trade shows that FDI capital from the UK clearly prospered after the implementation of the UKVFTA, reflected in a strong increase in both the number of projects and newly registered capital.

By the end of 2023, the UK has 550 direct investment projects in Vietnam with a total registered investment capital of about 4.3 billion USD, ranking 15th out of 143 countries and territories with investments in Vietnam. Direct investment in Vietnam.

“In just a short time after the implementation of UKVFTA, the number of UK projects and investment capital in Vietnam has doubled. It is clear that there is great attention from British investors to Vietnam”, Deputy Director of the Multilateral Trade Policy Department (Ministry of Industry and Trade) Ngo Chung Khanh shared and emphasized that recently, The UK has invested in many large green energy projects in Vietnam, showing the orientation of the two governments in promoting climate change prevention, green energy development, and green economy.

Not stopping there, the UK’s recent official signing of an agreement to join CPTPP will add further motivation to promote stronger two-way economic, trade and investment relations in the near future.

Mr. David Johnstone, Head of FTAs Implementation, UK Ministry of Business and Trade, assessed that in addition to obvious tariff benefits, CPTPP also creates great benefits for both countries in integrating Integrate deeper into each other’s supply chains; At the same time, it facilitates the business process of both sides’ businesses and creates breakthrough growth potential with the prospect of expanding the agreement in the future.

EVFTA is also one of three new generation FTAs that Vietnam is implementing. Since this agreement came into effect, investment capital of EU countries in Vietnam has increased from 18 billion USD in 2016 to 28.91 billion USD in 2023.

The report on the Business Confidence Index published by the European Business Association in Vietnam also shows that Vietnam’s global investment attractiveness is still strong when up to 63% of surveyed businesses have ranked Vietnam is in the top 10 FDI destinations. Even more noteworthy, 31% of businesses ranked Vietnam in the top 3, of which 16% of businesses praised Vietnam as the top destination for FDI capital flows.

Vietnam’s 2023 industry focus announced by Savills also emphasized that Vietnam has signed 16 FTAs and is negotiating three more; In particular, EVFTA has marked an important turning point in trade and investment relations between Vietnam and European countries.

As for the US market, Mr. John Campbell, Deputy Director, Head of Savills Vietnam Industrial Services said: President Joe Biden’s visit and the upgrade of Vietnam-US relations to a global strategic partnership It is expected that the interest of investors from this market will increase positively in the coming time.

Play with big “players”.

In addition to continuing to negotiate new FTAs, since the second half of 2023, Vietnam has upgraded its Comprehensive Strategic Partnership with three major partners, the US, Japan and Australia, while deepening its Comprehensive Strategic Partnership with China in many important cooperation contents such as science and technology, semiconductors, new-generation official development assistance (ODA), green economy, digital economy, etc.

It can be seen that, along with the effects of implementing the Foreign Investment Law, economic diplomacy activities have actively supported promotion, advertising, and removing trade barriers for Vietnam to expand its market. , attracting external resources to develop industries that can create breakthroughs such as semiconductor technology, artificial intelligence (AI), and clean energy transition.

Deputy Foreign Minister Le Thi Thu Hang shared: Economic diplomacy in recent times has been implemented drastically and comprehensively, with profound changes in quality and quantity, achieving many important results, including contributions to Attracting high-quality FDI and new generation ODA, forming favorable frameworks to attract resources for green transformation, digital transformation, innovation, and deeper participation in supply chains regional and global response.

Notably, Vietnam signed the Fair Energy Transition Partnership (JETP) with an initial investment worth 15.5 billion USD; the world’s first carbon neutral factory project worth 1.3 billion USD of the Lego Group or the 220 million USD Research and Development Center of the Samsung Group.

From an economic expert’s perspective, Dr. Vo Tri Thanh said that important results in foreign affairs in general and economic diplomacy in particular have contributed to creating a favorable and stable international environment. for economic development; attract resources, clearly demonstrated through achievements in the fields of economics, trade, investment attraction, production and business.

This process also contributes to institutional reform, improving the investment and business environment, creating attractiveness and attracting international investment sources to Vietnam. Not only that, Vietnam has also begun to “play with the big players”, participating in a more proactive role when joining hands with other countries to build and establish new rules of the game on international trade. , new generation FTAs have high quality like CPTPP.

Clearly, the diplomatic sector is playing an important role in connecting Vietnam with “big players” and large investors in the world. However, this also requires us to behave flexibly and react quickly so as not to be slow or miss opportunities.

Master Nguyen Tran Minh Tri, Institute of World Economics and Politics, Vietnam Academy of Social Sciences, said that economic diplomacy has truly become the central task of the entire Vietnamese diplomacy, creating a strong transformation from thinking, awareness to action in ministries, branches, localities and businesses.

In addition, economic diplomacy has been helping industries, sectors, localities, and businesses expand diverse spaces for development, making Vietnam an important link in regional economic links. and globally.

In the context of current geopolitical fluctuations and technological revolution, Mr. Tri recommends that economic diplomacy should continue to be implemented according to the major orientations of the Party and the State’s policies.

That is to focus and be specific on the results of attracting high-quality FDI flows for high-tech industries; increase the scale of international tourists entering Vietnam; Expand and diversify markets, products, supply chains, increase export orders for the textile and garment, footwear, seafood, wood and fruit and vegetable industries, both ensuring immediate and long-term benefits. to long-term benefits; Accelerate the signing of FTAs, consolidate the market share of Vietnamese goods in traditional markets and expand niche markets and untapped potential markets.

In recent years, Vietnam has effectively implemented three strategic breakthroughs in institutional reform, infrastructure development, and improving the quality of human resources. Vietnam welcomes and welcomes international investors to invest in the spirit of “harmonious benefits, shared risks”, equality, sincerity, mutual benefit, and respect for international law.

Vietnam’s orientation is to attract investment selectively, prioritizing projects in emerging fields, high technology, high added value, and pervasive and connected properties, especially serving economic activities. new growth force, promoting digital transformation, green transformation, strongly developing a number of new breakthrough and strategic fields such as semiconductors and artificial intelligence (AI).

Minister of Planning and Investment NGUYEN CHI DUNG

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