Catching opportunities from ASEAN economic community – Part 6

Part 6: Investment luring intensified

ASEAN Economic Community (AEC) holds the major opportunities for internal investments to pour into Vietnam and Binh Duong Province in particular. Thus, various experts asserted that AEC, in the near future, would trigger strong growth of internal and external Foreign Direct Investment (FDI) across localities of Vietnam.

8 ASEAN nations to invest into Vietnam

By the newest reports of Foreign Investment Bureau of Ministry of Planning and Investment, up to date, 8 ASEAN nations have registered for FDI into Vietnam, Singapore, Malaysia, Thailand, Brunei, Indonesia, Philippines, Laos, and Cambodia with 2,681 projects of US$ 56.32 billion. The nations have made investments into 18 economic sectors of Vietnam, showing the diversity of investment within ASEAN.

AEC opens up great opportunities for Binh Duong Province to continue with investment luring in and outside of ASEAN for the time to come. In this photo: Production activities are being carried out at Chutex International Co. Ltd. Photo: X. Thi

Processing and creation industries have attracted the most investments sustaining at 1,009 projects and US$ 22.2 billion accounting for 40.8% of total FDI of ASEAN nations into Vietnam. Majority of processing and creation projects from ASEAN nations are Singapore originated with 438 projects of US$ 13.4 billion, accounting for 43% of total projects and 60% of total FDI of ASEAN nations in the industries in Vietnam. Thailand was second to Singapore with 184 projects of US$ 5.7 billion, accounting for 18.2% of total projects and 26% of total investments. In the third place, Malaysia was accounted for 225 projects of US$ 1.98 billion at 22.2% of total projects and 9% of total investments.

Of the 8 ASEAN nations investing into Vietnam, Singapore topped up 1,456 projects of US$ 33.45 billion, accounting for 59% of total investments of ASEAN in Vietnam. Singapore was also ranked third place out of 105 investing nations in Vietnam by the newest reports of the foreign investment bureau. Foreign investments from Singapore keep growing in recent years. Investment projects of Singapore have been highly effective to dramatically contribute to the job creation, exportation and economic growth of Vietnam. Malaysia was placed secondly with 505 projects of US$ 13.3 billion in investments, accounting for 24% of total investments from ASEAN to Vietnam. Thailand was thirdly with 40 projects of nearly US$ 7 billion, accounting for 12% of total investments from ASEAN to Vietnam.

Up to date, investments from ASEAN have been present at 56 out of 63 localities nationwide but staying concentrated in large cities and localities where the infrastructures have been convenient for development such as Ho Chi Minh City, Binh Duong, Ba Ria Vung Tau, Ha Noi, Hai Duong, etc.

Ho Chi Minh City was still the first city of attraction to ASEAN with 1,169 projects and US$ 16.07 billion, accounting for 29% of total registered investments of ASEAN nations in Vietnam.

Binh Duong – the spotlight of investment attraction from ASEAN

The close relationship of Singapore and Binh Duong Province was thanks to the clear regime and good infrastructure of Binh Duong through years. Tran Van Nam, the former Chair of Provincial People’s Committee and the current Secretary of Provincial Party Committee, informed that of big investments into Binh Duong Province, Singapore only stayed in the 4^th placement regarding its investment scale but still the relationship was so tight. Through the years, thorough cooperation of Binh Duong and Singapore has been well made, bringing up effective cooperations marked by the establishment of Vietnam-Singapore Industrial Parks.

Chu Ying Piao, the President of Chutex International Co. Ltd. in Song Than Industrial Park 2 of Di An Town, said: “I have been to Binh Duong for the first time 20 years ago in a diplomat delegation of Singapore, seeking for investment opportunities. From that very day, I have discovered great potentials in cooperation and work in the locality. In fact, when the projects are oriented to Binh Duong Province, we have been offered great help of the local authorities. I think that AEC will enable more Singaporean investments to come to Binh duong Province.”

Up to date, Singapore has 138 stable investment projects with high yields in Binh Duong Province with US$ 1.722 billion of investment and the 4^th placement out of 38 nations and territories of current investments in Binh Duong Province.

Hoang Duc Hien, the Singaporean diplomat in Vietnam, confirmed: “We consider Binh Duong as trustful economic partner for development. In years, Binh Duong Province is a good destination for investments from Singapore. We believe that the success of VSIPs will be expanded by the very existence of AEC. And, from 2016 on, investments from Singapore and the world will be poured to Binh Duong Province.”

VSIPs is the symbol of diplomat relationship of Vietnam and Singapore for 21 investment projects in Binh Duong Province with VND 3,834 billion and 426 foreign investment projects. Of the investments, large companies and groups of high-tech, electronic parts, and precision mechanics from Japan, South Korea, Singapore, USA, and Malaysia have mushroomed in Vietnam.

The success of VSIPs will open up internal investment opportunities as AEC comes into force. This is the good example of successful cooperation of FDI for economic development. Binh Duong, as a resillent province, have been so open in 20 years to internal investment cooperation. Thus, as AEC comes into existence from January 01, 2016, Binh Duong Province will become a good example of investment luring in ASEAN. This will be also the chance and challenge of trade promotion for the time to come.

Recent statistical data of Japanese Chamber of Industry and Trade showed that FDI of Japan into ASEAN has reached US$ 23 billion – the second largest investments into ASEAN and 18.7% of total FDI into ASEAN. Within 10 recent years, FDI of Japan into ASEAN has been multiplied by 10 times and bilateral trade of ASEAN and Japan by 2.4 times. Japan is the third largest investing partners in ASEAN with bilateral trade value of US$ 281 billion in 2015. Experts asserted that investment flow from Japan would grow stronger as AEC comes into existence upon the recognition of opportunities and potentials of investments into ASEAN and the potential markets of Vietnam, Myanmar, and Thailand.

Reported by Khanh Vinh – Translated by Vi Bao