FDI in Vietnam rose 44 percent to hit new record in 2017

Workers manufacture mechanical gear at Japanese-invested RK Engineering Co. ltd. in Dinh Vu Industrial Zone in Hai Phong city (Photo: VNA)

Vietnam has remained an attractive destination for foreign investors in 2017 with total FDI capital registered in the country hitting a record high of 35.88 billion USD, up 44.4 percent against last year.

Reports from the Foreign Investment Agency under the Ministry of Planning and Investment showed that of the sum, 21.27 billion USD came from 2,591 new projects, up 42.3 percent against last year.

Another 8.41 billion USD was added to 1,188 existing projects, 49.2 percent higher than last year.

The remainder of the FDI, worth 6.19 billion USD, came from 5,002 deals made by foreign investors to contribute capital to businesses and to buy shares of Vietnamese businesses, jumping 45.1 percent compared to last year.

In 2017, FDI disbursement also saw a record setting, as it increased 10.8 percent to 17.5 billion USD. In the previous years, the capital influx reached only some 11-12 billion USD.

Among 19 industries and sectors attracting FDI capital in 2017, the manufacturing-processing industry remained the top sector, receiving 15.87 billion USD, accounting for 44.2 percent of the total registered FDI.

The electricity production and distribution sector ranked second with 8.37 billion USD, representing 23.3 percent of the total FDI. The real estate sector was in third place with 3.05 billion USD, totalling 8.5 percent.

Among 115 countries and territories investing in Vietnam this year, Japan topped the list, with 9.11 billion USD, making up 25.4 percent of the FDI pledged to the country. It was followed by South Korea with 8.49 billion USD or 23.7 percent of the FDI, and Singapore with 5.3 billion USD or 14.8 percent.

The southern economic hub of HCM City was at the top, among 59 localities receiving FDI during the year, followed by the northern province of Bac Ninh and the central province of Thanh Hoa.

Among some of the mega projects in 2017 were three BOT thermal power projects. They were Japan’s 2.8 billion USD Nghi Son 2 thermal power plant in the central province of Thanh Hoa, Japan’s 2.58 billion USD Van Phong 1 thermal power plant in the central province of Khanh Hoa and Singapore’s 2.07 billion USD Nam Dinh 1 thermal power plant in the northern province of Thai Binh.

Large projects in other industries included the Republic of Korea’s 2.5 billion USD Samsung expansion project in the northern province of Bac Ninh, the 1.27-billion USD Block B O Mon gas pipeline project in the Mekong Delta province of Kien Giang and the Republic of Korea’s 885.85 million USD smart complex project in HCM City’s Thu Thiem New Urban Area. 

To fully capitalise on the FDI capital source in the new stage, the Ministry of Planning and Investment is drafting the foreign direct investment strategy for 2018-23. With assistance from the World Bank, the FDI strategy drafts that Vietnam at this stage should focus on sectors having advantages, and those that foreign firms could bring more benefits to, rather than domestic firms. 

Under the draft strategy, Vietnam should set out priority sectors for attracting FDI, such as those that needs increased value and competitiveness, including manufacturing (high-grade metals/minerals/chemicals/plastics and high-tech/electronic components); service (logistics and maintenance, repair and overhaul); agriculture (innovative and high value agricultural products such as rice, coffee, seafood, fruits); and travel (high-value tourism services).

VNA