Foreign investment into Vietnam ‘on track for recovery’

Foreign investment inflow into Vietnam is regaining momentum, with disbursed capital in the first two months of the year rising 7.2 percent year-on-year to $2.68 billion.

The Foreign Investment Agency (FIA) attributed the “recovery” to the government’s “timely and suitable measures” that helped enterprises ride out difficulties and maintain or expand business despite Covid-19 raging on.

The measures included ensuring the harmony between reopening and effective disease control, while accelerating vaccination, according to the Vietnam Chamber of Commerce and Industry (VCCI).

Corporate representatives at the Vietnam Business Forum (VBF) in February praised Vietnam’s transition from the “zero-Covid policy” to safe and flexible adaption to Covid-19, with effective control of the disease to boost socio-economic recovery.

Newly-registered capital dropped an appalling 80.9 percent to $631.8 million due to a lack of new large-scale projects, but the number of newly-registered projects rose by up to 45.2 percent to 183.

Notably, 142 projects had investment capital expanded, up 23.5 percent, while registered additional capital hit $3.6 billion, a 2.2-fold increase.

There were 400 stake acquisitions in the period, down 10.1 percent, but the aggregate capital contribution hit $769.6 million, up 41.7 percent.

“The figures show the investors’ confidence in the country’s anti-pandemic outcomes and its investment climate in the new normal,” the FIA noted in its release.

At the VBF, Chairman of EuroCham Alain Cany said business leaders have signaled a vote of confidence in Vietnam’s “new normal” trade and investment environment, with EuroCham’s Business Climate Index (BCI), its regular barometer of European business leaders, increasing by 42 points to 61 in January.

“The government’s ambitious and accelerated vaccine roll out, combined with the tireless and heroic work of our frontline healthcare professionals, have enabled a gradual re-opening of the country.”

In the year to February 20, 2022, the total of newly-registered capital, expanded capital and capital contribution for stake acquisitions of foreign investors was nearly $5 billion, equivalent to 91.5 percent of the same period last year.

Of the total registered capital, the majority $3.13 billion or 62.7 percent flowed into manufacturing and processing.

The real estate sector lured $1.52 billion, accounting for 30.4 percent of the total sum. The tally was an over three-fold rise against the $485 million recorded the same period last year.

Among the foreign-invested projects with a large capital addition is the Singaporean-backed project to build urban infrastructure and services VSIP Bac Ninh. This project, in Bac Ninh province, had $941 million added to its capital.

Others include the Korean-invested Samsung Electro-mechanics in Thai Nguyen province, with a $920 million injection, and the Hong Kong-backed factory to manufacture electronic equipment and multimedia products in Bac Ninh province, with nearly $306 million in additional capital.

Among the 51 countries and territories registering new investments in Vietnam in the last two months, Singapore led the pack with $1.7 billion, accounting for 34.2 percent of the country’s total sum and up 59.3 percent year-on-year.

South Korea ranked the second with $1.4 billion or 28.2 percent, down 12 percent. Next was mainland China with $538 million or 15.3 percent, down 29.3 percent, followed by Hong Kong, Japan and Thailand.

The foreign sector’s export, including crude oil, in the two-month period was estimated at $41.9 billion, up 12.4 percent year-on-year and accounting for 73.1 percent of the country’s export turnover. Excluding crude oit, the figures were $41.6 billion, 12.2 percent and and 72.5 percent, respectively. The sector recorded a trade surplus of over $3.9 billion if crude oil is included and $3.6 billion if not.

From the country opened its door to foreign investments in late 1980s to Feb.20, 2022, 34,700 projects had been registered in Vietnam and remained valid, with total investment capital of $418.8 billion. Disbursed capital hit nearly $254.3 billion, equivalent to 60.6 percent of registered capital of valid projects.