Vietnam seeks big investments in high tech, renewables, logistics: forum

Vietnam is looking for critical private investments in the sectors of high technology, semiconductors, renewable energy (LNG, hydrogen, electric batteries), logistics, industrial park development, innovation, and digital transformation.

Vo Van Chung, deputy head of the Foreign Investment Agency (FIA), under the Ministry of Finance, made the statement at the Europe-Asia Industry Cooperation Forum which is taking place in Hanoi.

"The Government encourages projects with high technology, high added value, environmental friendliness, and potential reach-out to domestic enterprises," Chung told the forum, which gathered nearly 300 enterprises and investors from Europe, China, and Vietnam.

"Investors assess Vietnam not only as an attractive destination in terms of cost and human resources, but also as a potential market for developing high-tech, environmentally friendly projects that are capable of effectively connecting with the large ASEAN market," he added.

Jetro's recent survey shows that more than 56% of Japanese enterprises want to expand their business investment in Vietnam in the next 1-2 years - the highest rate in the ASEAN region.

Under a EuroCham survey, up to 75% of European business leaders said they were willing to introduce Vietnam as an ideal investment destination. The Business Confidence Index of European enterprises in Vietnam in Q4/2024 skyrocketed to 61.8 points - the highest level since 2022.

Singapore's UOB bank stated that it believes Vietnam is not only an attractive destination for FDI capital flows, but also plays a strategic role in the ASEAN value chain.

Chung stressed that Vietnam is actively improving the business climate through simplifying administrative procedures, enhancing transparency, stabilizing policies, and developing an ecosystem to support investors.

"In its FDI attraction strategy for the coming period, the country has identified a clear direction: selectively attracting investment and prioritizing quality, efficiency, innovation, and sustainable development," he noted.

Hoang Thanh Tam, head of the investment promotion division under the FIA, added that the potential investment fields in Vietnam are electronics, semiconductors, renewable energy, innovation-R&D, digital economy-digitization, high-tech agriculture, and international financial center development.

Vietnam plans to develop one international financial center that will operate in Ho Chi Minh City and Danang city. The draft National Assembly resolution on developing such a center is expected to get approval at the legislature's ongoing working session, which will last until June 30.

Adapting to new global contexts

Prof. Nguyen Mai, former Vice Chairman of State Committee for Cooperation and Investment, told the forum that one of the positive things about Vietnam is Vietnamese authorities being very proactive in adapting to new global contexts and in turning challenges into opportunities.

"Vietnam is one of the first ASEAN countries to implement the Global Minimum Tax (GMT), starting in early 2024, and tech giants are benefiting from the early enforcement," said Mai, also former chairman of VAFIE.

He noted that the U.S. reciprocal tariff policy has worried the business circle to the point that many companies worldwide have delayed their investment plans or stopped receiving orders. "But Vietnamese authorities have been very proactive in responding to the situation, and the outcomes are promising."

Party chief To Lam had a phone call with President Donald Trump on April 4, two days after Trump's first tariff announcement, in which the Vietnamese leader said the country is willing to negotiate with the United States to cut import tariffs on U.S. goods down to zero.

Vietnam has also showed great efforts to narrow its trade surplus with the U.S. by signing deals to buy more American goods, like the agreements to import nearly $3 billion worth of American agricultural products.

As part of the effort, budget carrier Vietjet Air and AV AirFinance on April 10 signed an aircraft financing agreement totaling $300 million, while national flag carrier Vietnam Airlines inked an MoU with Citibank to secure a funding commitment exceeding $560 million.

Negotiations between Vietnam and the United States have showed positive signs, Mai noted. He suggested that Chinese investors shift investments to Vietnam to cash in on the multiple FTAs that the Southeast Asian country has signed with other countries.

Challenges on road to robust economic development

Beatrix Keim, director at the Center Automotive Research, said the challenges that Vietnam is facing on the road to a robust economic development include its aging population, automotive development promising but still depending on foreign know-how, trade policy uncertainty, environmental risks, climate change impact, structural change of economy, and policy adaptation.

"Vietnam is already considered as an alternative to China. ASEAN markets appear volatile but Vietnam's new energy vehicle market is growing fast. Automation is increasing. The country's restructuring plan for its transport system promotes domestic production. Renewable energy sources are rising," Keim mentioned some major features of the country's economic landscape.

Koen Soenens, general sales & marketing director at Deep C Industrial Zones, told the forum that Vietnam is a strategic investment detination and is evolving to become a regional manufaturing and logistics hub.

"The country is a market of over 100 million people with a middle class growing at the fastest rate. It is one of the most open and integrated economies, with many FTAs signed, and competitive in terms of operational cost, labor cost, and tax system.

"Vietnam's labor force is abundant and hardworking, with an average age of 32 years old. Inflation is under control, less than 4% since 2015. The political climate is stable," he added.

Soenens quoted the Hanoi-based Central Institute for Economic Management (CIEM) as saying that since its official implementation in 2020, the EU-Vietnam Free Trade Agreement (EVFTA) has led to a 40% increase in bilateral trade volume.

Vietnam a nation of sweeping changes

After 40 years of innovation, Vietnam has transformed from a war-torn economy into a middle-income developing country, striving to become an upper-income nation by 2030 and a developed industrial country by 2045.

To achieve these goals, the country has set a GDP growth target of at least 8% this year and double-digit growth in the coming years, along with strategic resolutions on science, technology, digital transformation, international integration, legal reform, and private sector development.

Major infrastructure reforms are underway, including hundreds of billions of U.S. dollars in national key projects like the North-South Expressway, Long Thanh International Airport, and high-speed railways.

The country has maintained its macroeconomic stability amid global turbulences, being one of the few countries with a high growth rate. In 2024, GDP increased by 7.09%, among the highest in the region.

Inflation was controlled below 4%. Import-export turnover reached $786.29 billion. In particular, the total registered FDI reached more than $38.2 billion in 2024, putting the country in the top 15 most attractive FDI destinations globally.

To date, more than 43,300 FDI projects have been licensed in the country that remain in effect, with total registered capital of over $517 billion. South Korea, Singapore, Japan, and Taiwan are the top investors.

Capital flows from Europe are increasing rapidly with impressive growth rates, such as the UK (+172%), Poland (+1,000%), Luxembourg (+1,100%), showing the positive impact of new-generation Free Trade Agreements (FTAs) such as EVFTA and CPTPP, according to the FIA.

Disbursed FDI capital has reached over $329.3 billion to date. The FDI sector is a crucial part of the economy, contributing around 20% of GDP, over 70% of exports, and 25% of total government revenue.

The Vietnam's Association of Foreign Invested Enterprises (VAFIE) and F&H International Industry organize the Europe-Asia Industry Cooperation Forum in Hanoi today.

The forum aims to promote cooperation in high-tech industries between European, Chinese, and Vietnamese enterprises, focusing on green production, digital transformation, technology transfer, and industrial investment linkages.

"We chose Vietnam as the location of this forum because we deeply believe in its future: a future of industrial innovation, green growth, and global integration," said Jian You, CEO of F&H International Industry.

VAFIE is the parent entity of The Investor (www.theinvestor.vn).

F&H International Industry works to connect ideas, people, and technologies between Europe and Asia, across sectors like automotive, advanced manufacturing, semiconductors, and green technologies.