Vietnam could be about to receive a new wave of investment following President Joe Biden's visit last month.
Vietnam has seen three significant foreign direct investment booms in the past. The first occurred when Honda Motor began producing two-wheelers in Vietnam in 1997. The second wave lasted from 2000 to 2008 when the US bank Lehman Brothers collapsed, causing the global financial crisis. During this period, Samsung Electronics invested in a smartphone manufacturing facility in Bac Ninh in 2009.
The third boom, which seems to have taken off in the mid-2010s, has been a hotbed for foreign consumer businesses, with the Japanese retail giant Aeon opening its first store in Vietnam, Aeon Mall Tan Phu Celadon, in 2014.
President Biden's recent visit could stimulate a wave of US investment in Vietnam, an opportunity to form a fourth wave of FDI.
Previously, US FDI in Vietnam was considered very modest compared to other Asian countries such as Japan and South Korea. By the end of 2022, the total US direct investment in Vietnam was 11.4 billion USD, ranking 11th among countries and territories investing in this market of more than 100 million people. In comparison, South Korea is investing 80.9 billion USD, Singapore is 70.8 billion USD, and Japan is 68.8 billion USD.
Vietnam currently wants to shift from traditional labor-intensive industries such as textiles and electronics assembly to high-tech industries with high added value. Cooperation with US technology companies, especially those with a position in the semiconductor and AI fields, will be very important in transforming the country's industrial structure.
Prime Minister Pham Minh Chinh recently requested the development of a human resource development project with the goal of training 30,000-50,000 engineers and 100 experts in digital transformation, chip manufacturing, and semiconductors. Vietnam is also considering new measures and policies to attract multinational companies. However, it will take more time to know whether the fourth FDI boom in Vietnam will become a reality.
In September, during a visit to Vietnam, President Joe Biden and General Secretary Nguyen Phu Trong established a comprehensive strategic partnership between the two countries. Mr. Biden’s trip also resulted in a number of major business deals. For example, Vietnam Airlines signed an agreement to buy 50 Boeing 737 Max aircraft, worth about $10 billion.
FPT Software also announced a strategic partnership with US startup Landing AI. Synopsys, an industry-leading semiconductor design, IP and software security software solutions provider, also signed a memorandum of understanding to help train Vietnamese semiconductor workers.
Later, Prime Minister Pham Minh Chinh also had a working trip to the US. While visiting the headquarters of chip giant Nvidia, the Prime Minister suggested that the group establish a factory in Vietnam, considering Vietnam as a stronghold in Southeast Asia. He also received leaders of some of the leading technology corporations in the US such as Bill Gates and Elon Musk.
Duc Minh ( according to Nikkei )
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