Japan eyes Vietnam as production base

Speaking at the Vietnam-Japan Investment and Tourism Promotion Conference in Ho Chi Minh City on April 22, Nguyen Thanh Phong said Japan was a leading economic partner of Vietnam, especially of Ho Chi Minh City.

He said that Vietnam had become a long-term investment site for the Japanese because of its convenient geographic location, stable politics, improved infrastructure and abundant and low-cost labour force.

With more than 865 projects with a total registered investment capital of US$2.87 billion, Japanese ranks sixth out of countries and territories having investment in the city, he said.

In recent years, Japanese visitors have ranked first or second in the top 10 of foreign visitors to the city, and the number of Vietnamese visitors to Japan has also increased significantly.

The city expects to continue to receive co-operation and support from the Japanese Government and enterprises to improve the growth , he said.

"The city will always welcome and create favourable conditions for foreign investors, including Japanese, who come to seek long-term investment and business opportunities," he said.

Speaking at the conference, a special advisor to the Japanese Prime Minister, Iijima Isao, who also led a delegation of 22 Japanese businesses to Ho Chi Minh City, said he believed that Japanese firms would continue to invest strongly in Vietnam, particularly in Ho Chi Minh City.

The Japanese busineses who visited the city this time are Japanese leading companies involved in pharmaceutical, medical, water and waste treatment, agricultural, transport, construction, logistics, manufacturing, tourism and IT sectors.

Vu Tien Loc, chairman of the Vietnam Chamber of Commerce and Industry, said the country’s participation in a series of free trade agreements, including the Trans-Pacific Partnership, had made it more popular among investors.

Recently, many investors from Japan, the US and EU have visited Vietnam to seek business opportunities, he said, adding that many companies had shifted their investments from China to ASEAN countries, including Vietnam.

Masuda Chikahiro, deputy chief of JICA Vietnam, said Japanese companies wanted to penetrate the market of nearly 100 million people in Vietnam and use it as a production base for export.

He said that reform of the investment environment was needed to welcome a new investment wave to Vietnam.

Japanese firms, he said, were striving to overcome two difficulties, including the rate of locally-made products supplied to Japanese producers in Vietnam. This stands at about 33% in 2014, much lower compared to countries in the region.

Secondly, the country’s human resources have yet to meet requirements of Japanese firms, he said.

Vietnam should solve issues such as these mentioned in the Vietnam-Japan Joint Initiative, he said.

At the conference, Pham Thiet Hoa, director of the Investment and Trade Promotion Centre of Ho Chi Minh City, told Japanese investors that the city was seeking investors for the 27.2 km monorail line No 2 and the 6.3 km underground monorail number 6 projects, as well as the underground mall project at the Ben Thanh Central Station and the Saigon Safari project in Cu Chi District.