Q1 foreign direct investment surges to $7.71b

Foreign direct investment (FDI) in Vietnam surged to US$7.71 billion in the first quarter of 2017, exceeding the amount during the same period in 2016 by 91.5 per cent.

A mobile phone assembly line of Samsung ectronics Vietnam in the northern Bac Ninh Province’s Yen Phong Industrial Park. — Photo baobacninh.com.vn

Figures released Friday by the planning and investment ministry’s Foreign Investment Agency (FIA) showed that during this period, there were 493 newly approved projects with a total registered capital of up to $2.9 billion, up by 6.5 per cent compared to the same period last year.

At the same time, 223 projects from the previous years applied for capital adjustment, for an added amount of $3.94 billion, representing a 206 per cent year-on-year rise. Foreign investors also contributed $852.8 million to local projects in the period, a 171.5 per cent from the corresponding period last year.

Capital disbursement for FDI in the first quarter of 2017 was estimated to reach $3.62 billion, up by 3.4 per cent compared to the same period in 2016.

The rapid increase of FDI in Vietnam is because of several large-scale newly approved projects in March. Notably, the Samsung Display project got expansion approval in northern Bac Ninh Province, with an additional investment of $2.5 billion. This pushed the FDI figures to US$7.71 billion in the first quarter, which is double that in the first two months.

The other big projects that got the nod include Taiwan Polytex Far Eastern (Vietnam) Company in southern Binh Duong Province ($485.8 million); Coca-Cola Vietnam in Hà Nội ($319.8 million additional capital); Vietnam Singapore Industrial Park III ($284.75 million); Tole Panel plant in southern Bình Phước Province ($269.5 million), and Kolon Industries Inc ($220 million).

Thanks to Samsung’s billion-dollar project, Bắc Ninh Province saw the largest registered capital of $2.61 billion, accounting for 34 per cent of the total FDI in Vietnam in Q1. It is followed by Binh Duong Province at $1.39 million or 18 per cent of the country’s total FDI. HCM City took the third place with $600 million.

South Korea was the most significant investor with $3.74 billion, followed by Singapore with $910.8 million and China with $823.6 million.

The processing and manufacturing sector remained the most attractive area to foreign investors, and saw a total investment of $6.54 billion. Real estate followed with $343 million. The wholesale and retail sectors took the third place at $296.8 million.

Vietnam a targeted market

The surge of FDI in Vietnam in the first quarter, in turn, has made it a more attractive destination for foreign investors.

Cushman & Wakefield Consulting Group’s latest report on capital market showed that Vietnam has been a potential destination for global investment inflows. In the 2014-16 period, the country received around $66 billion in FDI, an average increase of $2 billion a year.

Ben Gray, director of capital market department at Cushman & Wakefield Vietnam, said foreign investors paid a lot of attention to Vietnam. This year and the years to come will be a favourable time to invest in assets in the country.

A lot of FDI has come into the property market, accounting for 10 per cent of the average FDI per year, and this sector is considered a possible investment channel to help managers earn profits.

FDI disbursement in 2016 was a record high at $15.8 billion.

The Provincial Competitiveness Index (PCI) 2016, released last week by the Vietnam Chamber of Commerce and Industry, said the record FDI disbursement in 2016 is an important step for the economy as it shows investor trust.

The PCI report also quoted analysis from fDi Intelligence that stated that Vietnam held the top position in the Greenfield Investment Index among new emerging economies.

Nguyễn Mại, former vice-chairman of the State Committee for Co-operation and Investment, said high FDI inflows could go beyond 2020 if the country continues to maintain its advantages of steady growth rate, stable politics and economy.

Sounding a word of caution, Phan Huu Thang, former director of FIA, said Vietnam had viewed attracting FDI as an achievement in the past few years, but that there had been issues such as environmental pollution and transfer pricing. Vietnam should not aim to attract FDI at any price, he said. The country should choose suitable FDI projects and maintain a good balance of partners to avoid a lot of dependence on only a few investors.

Mại agreed and said the government should change direction and policies for attracting FDI in the future. The new policies should focus on clean energy development, environment-friendly technologies and hi-tech agriculture.


Other news

Most view


VNPT & SeABank cooperate to enhance connections

The Vietnam Posts and Telecommunications Group (VNPT) and SeABank just co-signed cooperation agreement, aiming to develop the two sides’ economic, business and investment potential.


185 leading domestic & in't enterprises join in VN ETE 2018

The Vietnam Exhibition of Electrical Technology and Equipment (Vietnam ETE 2018) and the Exhibition of Products, Technologies for Energy Saving and Green Power (ENERTEC EXPO 2018) yesterday kicked off in HCMC’s Saigon Exhibition Convention Center in district 7.

Self - introduction

VNPT targets to be leading digital service provider in Vietnam

The grand opening ceremony of the VNPT-Information Technology Company (VNPT-IT), a new member of the Vietnam Posts and Telecommunications Group (VNPT), was held yesterday in Hanoi. With thousands of IT engineers and the focus on developing state-of-the-art technological products related to Artificial Intelligence (AI), Bigdata, and Blockchain, the new company is considered the main force to help VNPT fulfill the goal of becoming a leading digital service provider in Vietnam and an important Digital Hub of the neighborhood as well as the world.

Stock market

SAS profits VND 118bln

The Southern Airports Service Joint Stock Company (Sasco) which is listed under code SAS on the Unlisted Public Company Market (UPCoM), announced its second quarter’s financial report with net revenue at VND 634.5billion, an increase of 14 percent compared to last year.