Statistics on foreign direct investment (FDI) announced by the Vietnamese government do not fully reflect the importance of U.S. companies to the country’s economic and export growth, said a representative of the U.S.-ASEAN Business Council (USABC).
Some American investments in Vietnam come under legal entities in a third country, said Vu Tu Thanh, deputy regional director, chief representative of Vietnam, USABC, at a press meeting on Monday, in response to a question by The Investor.
U.S. companies often invest in the form of value chains, which is not reflected in statistics provided by Vietnam’s investment ministry. They do not directly bring money into Vietnam, but request their suppliers, mostly in the fields of electronics, footwear, and garments, to set up production facilities and hire laborers in Vietnam, Thanh explained.
These suppliers generate dozens of billions of USD in exports from Vietnam, he added.
“The importance of U.S. companies to Vietnam’s economic growth and exports is far beyond the accumulative FDI statistics,” Thanh asserted.
Ted Osius, president & CEO, U.S.-ASEAN Business Council, noted that some U.S. companies make investments in Vietnam through Singapore, like Pepsi and Coca-Cola.
“There's a certain amount of investment that goes through other countries for very good solid business reasons, but American investment does continue to grow in Vietnam,” Osius affirmed.
Osius is leading a business delegation on a fact finding trip to Vietnam on March 19-21, comprising about 50 companies in multiple fields, making it the largest of its kind since the two countries double upgraded their relationship to a comprehensive strategic partnership last September.
He declined to elaborate on possible deal announcements during the trip, but said that those companies are interested in doing more business in Vietnam. “I'm optimistic that the relationship and the investment will continue to grow.”
Data from the Ministry of Planning and Investment shows that the U.S. was the 10th largest investor in Vietnam as of 2023, with 1,336 valid projects worth $11.83 billion. In the first two months of this year, American firms invested $5.6 million in the country, down more than 50% year-on-year.