Vietnam - Rising star in attracting FDI

According to the Vietnam News Agency correspondent in Thailand, on August 18, the website thailandbusinessnews.com published an analysis by two authors Nguyen Trang and Boris Sullivan stating that Vietnam is emerging as the leading Foreign Direct Investment (FDI) destination in the region, thanks to its young and dynamic workforce, favorable trade agreements and stable political environment.

Workers work at a FDI company. (Photo: Tuan Anh/VNA)

According to the article, Vietnam's FDI story is on a steady growth trajectory. In 2023, Vietnam attracted 36.61 billion USD in registered FDI, up 32.1% over the previous year. This is a record high in recent years, affirming the growing role of a manufacturing powerhouse.

The authors cite a number of reasons why Vietnam shines, the first of which is its economic strength. Vietnam’s economy is forecast to grow by 5-6% annually, driven by strong consumption, exports and investment. Political stability provides a predictable environment, a rarity in emerging markets.

The article said Vietnam also has a demographic advantage, with a workforce of about 53 million people and a median age of 34.1 years. This is considered a young, skilled workforce, making Vietnam a priority choice for labor-intensive industries such as electronics and textiles.

In terms of policy strength, the authors appreciate the Vietnamese Government ’s implementation of investor-friendly reforms, including the 2020 Law on Investment and Enterprises and the Law on Public-Private Partnerships. In addition, the EU-Vietnam Free Trade Agreement (EVFTA) is expected to boost exports to Europe by 42.7% by 2025, making Vietnam a gateway to global markets.

In addition, the government's pro-business policies and its growing integration into global trade agreements, such as the Comprehensive and Progressive Agreement for Trans- Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP), have made Vietnam a rising star in the region, making it a more attractive destination for long-term investment.

The article argues that Vietnam also has strengths in industry. High-tech industries, especially artificial intelligence (AI) and semiconductors, are attracting large investments from Japan, South Korea and Singapore. The article states that Vietnam’s focus on high-tech industries has made the country a key player in the global supply chain, especially in the electronics and telecommunications sectors. Meanwhile, real estate and renewable energy are also attracting the attention of investors.

In addition, Vietnam's strategic geographical location, along with improving infrastructure and business support policies, further increase Vietnam's attractiveness to foreign investors.

The paper concludes that Vietnam excels thanks to its economic dynamism, cost advantage and strategic policies. Its ability to attract high-tech investment and integrate into the global supply chain has made Vietnam the leading country in FDI in ASEAN.

NBO

Source: https://baoninhbinh.org.vn/viet-nam-ngoi-sao-dang-len-ve-thu-hut-fdi-250818162341598.html