More Japan firms to boost investments in Vietnam next years

CA - Many Japanese investors have recently said that they will choose Vietnam as a destination for their investments next 1-3 years, in spite of its bottlenecks of workforce quality and weak infrastructure.

The agency quoted a survey by Japanese financial group Shokochukin as saying that Vietnam is the second choice in Asia for Japanese investors with 21% of 700 Japanese firms voted for the country.

Japanese companies said that the Vietnam’s socio-politic stability, abundant and cost effective labor force, tax incentives and the potential for economic development give Vietnam a very competitive edge.

Also according to the 2010 Vietnam Business Climate Report, 58% Japanese enterprises in Vietnam said they will raise their investments, 40% will maintain their operations while 1.4% will scale down and only 0.7% plan to withdraw from the country.

At a meeting with leaders from the Vietnamese Ministry of Planning and Investment in early July, an officials Japan’s Aichi province, Masanori Ito, said that many companies in his province plan to invest in Vietnam.

Currently, 70 companies in Aichi province, one of the largest economic and industrial centers in central Japan, are doing business in Vietnam, including Toyota, Honda, Suzuki and Yamaha.

However, some Japanese investors are concerned about electricity cuts and the quality of the workforce in Vietnam and they urged the country to focus on dealing with the problem to call more Japanese investments.

The Foreign Investment Agency said that Japan ranked 3rd among 39 countries and territories making investment in Vietnam with a total registered capital of US$1.22 billion in the first half of this year, accounting for 14.5% of the country’s total pledged FDI during the period.