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The US investment in Vietnam and the third investment wave
The US believes that Vietnam is a good destination for its investors. Experts are now talking about the third US investment wave in Vietnam.
The last month of 2010 proves to be the busiest for the US Ambassador to Vietnam Michael Michalak, who is going to wrap up his term in Vietnam.
After bidding farewell to the Prime Minister Nguyen Tan Dung on December 13, he has been attending a lot of farewell parties with different ministries and government agencies before ending the term of office, during which he witnessed a lot of significant events.
The US Ambassador witnessed three most important events relating to the US investment in Vietnam, including the signing of the contract on providing satellite, equipments for operation station and providing satellite launching service between the Vietnam Post and Telecommunication Group (VNPT) and the US Lockheed Martin Commercial Space Systems; the signing of the contract on BOT power project between Vietnamese Vinacomin Group and AES in April 2010; and the inauguration ceremony of the Intel’s factory at the HCM City High-tech Park in October 2010.
Talking about the AES’ project, Mr, Michalak said he believed that the 1200MW project and the huge investment capital of $1.8 billion shows the AES’ long term commitments to the energy development process in Vietnam. “Long term commitments” are the words commonly seen in most of the speeches of the US officials or businessmen when talking about the investments in Vietnam.
Since 1995, the two-way trade between Vietnam and the US has increased by 33 times. In 2009, the US became the biggest foreign investor in Vietnam. In the same? year, the two way trade reached $15.4 billion.
Even in the period of the global economic recession in 2009, the US exports to Vietnam still increased by 11 percent, while the country’s exports to other ASEAN countries saw two-digit decreases.
The new investment wave – what is it?
In April 2010, the Vietnam-US Business Forum was established, aiming to push up the trade and investment between Vietnam and the US, provide information about the laws and regulations which would have impacts on the business environment, to the Government, and foster the third-party cooperation, among the Ministry of Labour, War Invalids and Social Affairs, the Vietnam Labour Federation, and the Vietnam Chamber of Commerce and Industry (VCCI).
Mr. Michalak said that the US diplomatic delegation has defined the so called “the most potential areas”. These are the areas where the US companies have high competitiveness, including telecommunication, information technology, oil and gas exploration, power production, highway building, environment technology and aviation.
“Our main challenge is to make US companies understand that there are numberless business opportunities awaiting them in Vietnam,” he said.
The US investors have agreed that there is third US investment wave in Vietnam. Herb Cochran, Managing Director of AmCham, said that it is the right time to cooperate in order to serve the investment wave.
The first wave came in the period from 1995 to 2000. A lot of US companies have been very successful and expanding their business in Vietnam, including Cargill, Coca Cola, Pepsi, Kimberly-Clark, Procter & Gamble, Chevron, ConocoPhillips and ExxonMobil.
The second wave appeared after the Vietnam-US Bilateral Trade Agreement which took effect in December 2001. The open US market has become the big consumer of Vietnamese products, especially garment, footwear and interior products. A lot of US companies have got involved in the distribution of the products, thus helping increase Vietnam’s exports to the US from $1.1 billion in 2001 to $14.8 billion in 2010.
The third wave is considered as starting in 2006-2007 with the huge project of Intel in Vietnam. In 2010, more than 20 US companies that top the “Fortune 1000” list arrived in Vietnam to assess business opportunities.
Mr. Herb Cochran said that the important factor in the business strategy of companies is the concept “China + 1”, or “China and India + 1”. Vietnam was aware of the phenomenon in 2008, when it began taking steps to prepare for the third investment wave.
AmCham’s Chair Hank Tomlinson, at the Vietnam Business Forum held recently, emphasized that Vietnam needs to increase its competitiveness in attracting foreign investment. “High quality investments always go to the countries which offer optimal conditions,” he said.
He has called on the Government to cooperate with investors to settle problems, and to ensure that the business environment in Vietnam is competitive compared to neighbouring countries.
vietnamnet, vneconomy
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