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Vietnam set for 3rd wave of US investment: AmCham
Vietnam should brace for a wave of US investment soon, Jocelyn Tran, Chairwoman of the HCMC chapter of the American Chamber of Commerce in Vietnam, told Tuoi Tre.
The wave, the third, focused on high-tech manufacturing and services, began in 2006 with Intel’s US$1 billion plant which opened in Ho Chi Minh City last October.
More than 25 “Fortune 500” US companies have visited the country this year to explore opportunities in the value-added manufacturing and service industries, including electronics, automobiles, and chemicals.
The first wave of US investment came from consumer companies in 1995-2000. The second wave, mostly by foreign firms who were in partnership with US firms, occurred in the next five years.
Since Vietnam stands a chance of attracting US manufacturing firms, other sectors like power generation, transport, telecommunication, distribution/logistics/supply chain management, education, and healthcare should also be opened, Tran said.
The manufacturing sector needs the support of other sectors, she explained.
Vietnam is also becoming an increasingly important trading partner for the US in Southeast Asia given their strong trade expansion, with bilateral trade likely to be nearly $18 billion this year.
It has risen to this level from less than $1 billion 15 years ago.
More opportunities in the south, but challenges remain
There are plenty of opportunities in the Southern Key Economic Region (SKER) for American investors, Vietnam News Agency quoted Nguyen Thieng Duc, Vice Chairman of the HCMC Finance and Investment Company, as saying on the sidelines of the Vietnam-US Business Forum organized by AmCham and the Vietnam Chamber of Commerce and Industry (VCCI) last Thursday.
The SKER consists of HCMC and Dong Nai, Binh Duong, Ba Ria-Vung Tau, Tay Ninh, Binh Phuoc, Tay Ninh, Long An, and Tien Giang Provinces.
It contributes 60 percent of the country’s revenues and 70 percent of exports, and attracts the largest amount of foreign direct investment.
Each province and city in the region has a list of projects seeking investment that will help them switch from being an agricultural-based economy to an industrial-based one, he added.
“Foreign investors, including those from the US, however, face many challenges, such as cumbersome administrative procedures, poor infrastructure, and lack of a skilled workforce,” Nguyen Hong Ha, the VCCI’s Deputy Director, said.
Government agencies and business associations should therefore work together to draft effective policies and practices that will attract more investors, she added.
A lack of collaboration is most apparent in the field of infrastructure. An American business development professional, David Watson, told Saigon Times Daily that though roads in Binh Duong are quite good, it takes him three hours to travel the 50 kilometers to HCMC.
Watson said on the sidelines of the Vietnam-US Business Forum that provincial governments need to seriously consider creating good transport links, including rail and elevated links, between the localities to facilitate travel by investors and cargo movement.
He and other US entrepreneurs said a green environment was one of the decisive factors in their investment decisions.
“You cannot … build industries at the expense of anything else,” he said.
The Foreign Investment Agency said US companies had applied for licenses for new projects involving total investment of over US$1.79 billion by November 20, behind only the Netherlands and South Korea.
The agency ranked the US sixth in the list of top foreign investors behind Singapore, Malaysia, Japan, Taiwan, and South Korea with over $16.4 billion committed for projects in Vietnam.
vietnamnet, tuoitrenews
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