Japan was the first G7 nation to recognise Vietnam’s full market economy status, a valuable legal and trade appellation with far-reaching implications for the developing nation, and has since become Vietnam’s leading trade partner.

The Chief Representative of the Japan External Trade Organization (JETRO) in Hanoi, Atsusuke Kawada, was recently quoted as saying that “Vietnam-Japan relations are continuing to prosper with Japan’s investment capital increasing steadily in recent years”.

He suggested that State President Truong Tan Sang’s upcoming visit to Japan will provide an opportunity for Japan and Vietnam to discuss enhancement of the country’s investment in Vietnam and seek increased cooperation on a number of fronts.

Japan – largest ODA provider for Vietnam

Twenty years ago, Japan was the vanguard of countries resuming overseas direct assistance (ODA) for Vietnam. Japan also provided a wealth of assistance to the Vietnamese Government that positively impacted economic development and played a vitally important role in poverty reduction.

Through the construction of infrastructure such as roads, railways, power plants and ports, Japan’s ODA sources have helped attract more foreign investment in Vietnam, generate jobs, promote trade and contribute to a more vibrant socio-economic development.

Over the past 20 years, Japan has been Vietnam’s largest ODA provider, making up 30% of all donors’ cumulative capital.

From 1992 to March 31, 2013, Japan committed US$24 billion in ODA to Vietnam. Japan provided US$2.8 billion in ODA loans to Vietnam in the fiscal year 2011 and about US$2.03 billion in the fiscal year 2012.

At a recent press conference, Mori Mutsuya, Chief Representative of Japan International Cooperation Agency (JICA) Vietnam Office, said that in 2014, Japan will provide at least over US$2 billion in ODA to Vietnam, an equivalent figure to the amount provided in 2013.

Mr Mori added that his statement was made based on the fine relations between Vietnam and Japan. Japan recognised the important role of Vietnam and it is an important mission for Japan to help Vietnam restructure the country and promote economic growth.

Vietnam is making strong breakthroughts in its efforts to become an industrialised nation by 2020 and Japan will continue its support for Vietnamese people, he said.

He expressed hope to witness Vietnam’s new developments in the next 20 years.

Japan- the No 1 investor in Vietnam

The fourth phase of the Vietnam-Japan joint initiative on improving investment environment in Vietnam has been finalized while the fifth phase kicked off in 2013.

JETRO Chief Representative in Hanoi Atsusuke Kawada said that Japanese investment in Vietnam is on the rise with 416 projects capitalised at US$5.7 billion in 2013.

As from December 20, 2013 Japan has had 2,166 valid FDI projects in Vietnam with total registered capital of US$34.764 billion, topping among 101 nations and terrtories investing in Vietnam.

In January 2014, Japan had five newly-licensed projects worth US$5.19 million. According to JETRO, more than 2,000 Japanese businesses have been operating in Vietnam so far. In addition, many Japanese businesses have selected to invest in Vietnam instead of Chinese and Thai markets.

Recent JETRO survey on Japanese businesses’ operations has indicated that over 70% of Japanese businesses investing in Vietnam want to expand business activites in the next two years due to low-cost labour force compared to China and Thailand. In fact, several Japanese businesses have opened their second and third factories in Vietnam.

Japan – Vietnam’s important trade parter

Statistics from Vietnam Customs show that total import-export turnover between Vietnam and Japan reached US$4.02 billion in the first two months of the year, up 15.1% from last year’s period.

Of the figure, Vietnam’s Japanese exports hit US$2.2 billion, a sharp rise of 22.8% while Vietnamese import from Japan reached US$1.7 billion, up 6.3%.

Vietnam Customs office said that Japan remains a significantly important trade market of Vietnam, accounting for 10% of the country’s total import-export turnover.

\ Japan ranked fourth among Vietnam’s largest trade partner last year. Two-way trade turnover reached US$25.163 billion, of which Vietnamese exports to Japan hit US$13.581 billion, up 4% compared to 2012 and its imports from Japan was US$11.582 billion, down 0.2 %.

Vietnam’s key export items to the Japanese market are garments and textiles, crude oil, machines, equipment,seafood, wooden and plastic products, computers, electronics and components.

In a joint statement in 2011, both sides voiced their resolve to double bilateral trade turnover by 2020. Both nations have exchanged the Most-Favoured-Nation status since 1999.

Last but not least, on January 21, 2014, Japan abolished the examination of Ethoxyquin residues on Vietnamese shrimp products, thus facilitating bilateral agro-forestry-fishery trade.

(VOV)