Foreign-invested enterprises have become an important driving force for Vietnam’s economic development and international integration after 30 years since the country began attracting foreign direct investment (FDI).
Statistics from the Import-Export Department under the Ministry of Industry and Trade, from only US$10 billion in 1988 when Vietnam started absorbing FDI, the country’s total export revenue is expected to hit US$225 billion in 2018.
Notably, an annual average rise of 17.6% has been recorded in exports in the 2011-2015 period, much higher than the target set in the import-export strategy to 2020 with a vision to 2030 as well as the goal of 12% set out at the 11th Party National Congress. The FDI sector has played a key role in maintaining export growth of the country.
Tran Thanh Hai, Deputy Director of the Import-Export Department, said that six years ago, export value of domestic firms was higher than that of FDI enterprises, but now exports of FDI enterprises has tripled that of their Vietnamese peers.
FDI firms have made up 20% of the total State budget collection, 10 times higher than the figure in 2000. Particularly, over 50% of Vietnam’s total industrial production value comes from FDI firms. The FDI businesses have made a giant step in just a short time, but their influence on domestic companies remains modest.
Hai pointed out that the Republic of Korea’s Samsung Group is producing 40% of smartphones in Vietnam with export revenue of US$50 billion in 2017, equivalent to the combined export turnover of all domestic enterprises.
However, less than 30 domestic firms have been able to join the production chain of Samsung in Vietnam, Hai noted.
At the same time, tax evasion and transfer pricing have still been found in some FDI businesses, while many FDI projects have damaged the environment, which are bitter lessons for Vietnam in FDI attraction.
Moreover, although due attention have been paid to the transfer and receipt of technologies from FDI enterprises for years, the results have yet to reach expectation.
In 2018, Vietnam expects to open up a new and brighter chapter in FDI attraction. Experts held that not only in 2018 but following years, Vietnam will still be an attractive destination for foreign investors.
However, they also highlighted the need for more efforts from the Government as well as both domestic and foreign businesses in maintaining the bight prospect for Vietnam in investment attraction.