FDI - economic bright colors at the beginning of the year

VCN - Although Vietnam's FDI attraction in the first quarter of 2020 fell sharply compared to the same period in 2019, according to experts, in the context of difficulties caused by the disease, this is still an encouraging result and a bright spot in Vietnam's economic picture in early 2020.

Detailed information on imports and exports in second half of March
FDI enterprises preparing for life after pandemic
FDI enterprises’ import-export turnover hits nearly US$62 billion

FDI - economic bright colors at the beginning of the year
Manufacturing operations in Samsung Vietnam.Source: Internet.

Decreased 21% due to Covid-19

According tofigures just released by the General Statistics Office, Ministry of Planning and Investment, FDI attraction in early 2020 dropped sharply. By the end of March, the total newly registered capital, adjusted and contributed capital to purchase shares of foreign investors reached US$8.55 billion, down 21% compared to the same period in 2019. In particular, about charter capital, there were 236 times of adjusted registration projects with the total additional registered capital of over US$1.07 billion, equal to 82% compared to the same period in 2019.

If in recent years, the activity of capital contribution and share purchase of foreign investors has increased sharply on a quarterly and yearly basis, or even nearly doubled compared to the same period last year. In the first quarter of 2020, the total value of capital contribution and share purchase of foreign investors is nearly US$2 billion. This figure is equal to 34.4% of the value of contributed capital compared to the same period in 2019, down to more than 65%. Not to mention, FDI disbursement also decreased by 6.6% compared to last year.

"This is the first reduction of FDI disbursement in the period of 2016-2020," said Nguyen Bich Lam, General Director of the General Statistics Office.

The cause of the recent decline in FDI is primarily due to the impact of the Covid-19 pandemic on the world economy. The spread of thedisease has caused many foreign enterprises to postpone investment survey activities or delay the implementation of projects.

According to Nguyen Van Toan, Vice Chairman of the Association of Foreign Investment Enterprises, the impact of Covid-19 caused trade and travel activities to be limited, so there was almost no delegation of enterprises.

“The Covid-19 epidemic affected investment surveys and preparing to build factories. From the beginning of the year until now, especially after the Lunar New Year, very few businesses have come to Vietnam to survey investment," Nguyen Van Toan said.

According to Toan, the Covid-19 pandemic broke the system in the value chain, the global production chain, and just one stage in the broken investment process will affect the whole system, stallingproduction and that is also the reason affecting FDI attraction.

According to Assoc. Dr. Dinh Trong Thinh, Academy of Finance, Covid-19 caused financial, monetary and investment disturbance. The stock market was in turmoil and the gold price suddenly increased, so the investment also became dangerous. This is the reason why the investors delay and investment activities decline at the highest level, in many countries, not only in Vietnam.

Assoc. Prof. Dr. Dinh Trong Thinh also said that after the Lunar New Year, he had the opportunity to meet with leaders of Samsung Vietnam in Thai Nguyen, BacNinh. Right from that moment, the representative of this company said that the Covid-19 epidemic caused them to be worried because their material reserve for production until mid-March is over.

“At that time, the outbreak was happening in Wuhan, which greatly affected the input materials for production of many businesses, it was difficult to take care of enough raw materials to maintain production, so the expansion of production of enterprises was more difficult. This is also part of the reason for the increased capital of FDI projects in this quarter compared to 2019,” said Assoc. Prof. Dr. DinhTrongThinh.

Good control of Covid-19 to attract FDI

According to experts, with the gloominess of the global economy in the first quarter, the results of recent FDI attraction are quite positive.

In some key localities in attracting FDI such as Vinh Phuc, information from the Management Board of Industrial Zones of Vinh Phuc province said that the complicated situation of Covid-19 has affected revenue collection and attracting foreign investment, but thanks to actively supporting businesses to implement projects, solving difficulties and problems, seeking new investors, in the first two months of 2020, Vinh Phuc continues to be a destination for domestic and foreign investors.

Accordingly, the province has attracted two new FDI projects and four times of projects to increase investment capital with a total registered capital of US$21.4 million.

Making forecasts for the whole 2020, experts have relatively positive comments.

Assoc. Dinh Trong Thinh said that if the epidemic is controlled by the end of April 2020, GDP growth is still expected to be over 6% and FDI attraction is expected to be at US$38 billion, equivalent to 2019. This expert emphasized that increasing GDP growth and FDI attraction also depend on the ability of epidemic control countries of traditional partners of Vietnam, because if those countries are still heavily affected by the epidemic, they will affect the outputs and exports of Vietnam.

According to Nguyen Van Toan, even in the difficulties, we will find positive signs. Post-Covid-19, like a "compression force", FDI attraction may rebound after a period of quiet.

Ready capital, projects will be implemented quickly. Vietnam is one of the countries with the best assessment of the Covid-19 epidemic control, which will be a plus point in attracting FDI investment in the future. If Vietnam continues to have a good anti-epidemic momentum as now, the confidence of countries and FDI enterprises will be higher.

“It is forecasted that FDI into Vietnam in 2020 will decrease by about 10-20% compared to 2019, because this disease will affect strongly in the first half of the year. The second half of 2020 will be the time for the economies of countries to recover, accordingly, FDI in 2020 may decrease compared to 2019. The lesson for us after Covid-19 has passed is that the Government must take advantage of this opportunity to reduce dependence on China, must find other sources in the direction of either self-supply or attract FDI to invest in raw materials to ensure the supply of raw materials for production,” Toan stressed.

Experts also said that, with Directive 11/CT-TTg on urgent solutions to solve difficulties for businesses affected by Covid-19, FDI enterprises will also gradually remove difficulties in real estate business activities, thereby creating opportunities for Vietnam to attract more FDI inflows when the epidemic is over. In addition, the trend of foreign investment flows shifting from China to Vietnam to avoid US taxes in the US-China trade war, the EVFTA, effective from mid-2020will continue to be a driving force for FDI into Vietnam.

By HoaiAnh/ HuuTuc

Related News

Over 300 Southern enterprises attend workshop to provide feedback to the General Department of Vietnam Customs

Over 300 Southern enterprises attend workshop to provide feedback to the General Department of Vietnam Customs

VCN - On November 21, 2024, more than 300 enterprises from Southern Vietnam with significant import-export (I/E) volumes participated in a workshop held in Ho Chi Minh City. The event, organized by the General Department of Vietnam Customs, sought feedback on the draft decree amending and supplementing Decree No. 08/2015/ND-CP dated January 21, 2015, and the draft circular amending and supplementing Circular No. 38/2015/TT-BTC dated March 25, 2015, and Circular No. 39/2018/TT-BTC dated April 20, 2018, issued by the Minister of Finance.
Hanoi Customs resolves tax policy queries for enterprises

Hanoi Customs resolves tax policy queries for enterprises

VCN - Queries regarding customs consultation procedures and tax refunds due to price reduction clauses were addressed by the Hanoi Customs Department, providing clarity for businesses.
Quang Ninh Customs sees revenue boost of nearly VND 900 Billion from new enterprises

Quang Ninh Customs sees revenue boost of nearly VND 900 Billion from new enterprises

VCN - Efforts to attract and support businesses have significantly boosted state revenue for the Quang Ninh Customs Department, thanks to a proactive approach in facilitating customs procedures.
Developing supporting industries for the billion-dollar export commodity groups

Developing supporting industries for the billion-dollar export commodity groups

VCN - Electronic products and components are one of export commodity groups with turnover exceeding one billion USD, but the supporting industry for this group is still modest.

Latest News

Agricultural, forestry and fishery trade surplus value shoots up

Agricultural, forestry and fishery trade surplus value shoots up

VCN - According to the Ministry of Agriculture and Rural Development, the total export turnover of agricultural, forestry and fishery products in the first 10 months reached 51.74 billion USD, up 20.2% over the same period in 2023. Notably, the trade surplus value recorded a spectacular increase year on year.
New export and business cooperation opportunities from "dual conversion"

New export and business cooperation opportunities from "dual conversion"

VCN - According to a recent study from NielsenIQ, 16% of Vietnamese consumers consider a sustainable future as one of the important factors in their consumption decisions.
VN

VN's food processing industry struggles to improve quality and value chain integration

Despite accounting for 19.1 per cent of Việt Nam’s processing sector, the food processing industry has been struggling with major issues such as poor-quality raw materials and subpar value chain integration, said industry insiders and economists.
Approach strategy of the seafood industry when implementing UKVFTA

Approach strategy of the seafood industry when implementing UKVFTA

VCN - As one of Vietnam's strong export industries to the UK, especially when the Vietnam - United Kingdom of Great Britain and Northern Ireland Free Trade Agreement (UKVFTA) comes into effect, with a detailed information approach strategy, it has created a great driving force to promote the export of Vietnamese seafood products to this market.

More News

Mid-November: Vietnam

Mid-November: Vietnam's trade volume matches 2023 total, eyes record-breaking growth

VCN - By mid-November 2024, Vietnam's total import-export turnover reached an impressive US$681.48 billion, equaling the full-year trade figure for 2023
Vietnamese enterprises facing challenges from cross-border e-commerce platforms

Vietnamese enterprises facing challenges from cross-border e-commerce platforms

VCN – In recent years, with the rapid development of cross-border e-commerce (CBEC) platforms, domestic enterprises in Vietnam have been facing numerous difficulties and challenges.
Vietnam, Malaysia eye new milestone in trade ties

Vietnam, Malaysia eye new milestone in trade ties

The official visit to Malaysia from November 21-23 by Party General Secretary To Lam is expected to open up new opportunities for and mark a new milestone in the economic and trade cooperation between Vietnam and Malaysia. Vietnam and Malaysia are key economic, trade, and investment partners. Their economic and trade ties have steadily grown since the two nations established diplomatic relations in 1973.
Shrimp exports surge in 10 months, generating 3.2 billion USD

Shrimp exports surge in 10 months, generating 3.2 billion USD

Vietnam’s shrimp exports in October reached US$394 million, a strong 24% increase year-on-year, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).
Vietnam’s exports to the U.S. near US$100 billion milestone

Vietnam’s exports to the U.S. near US$100 billion milestone

VCN - By the end of October, Vietnam's exports to the United States approached US$100 billion, reaffirming its position as Vietnam's largest export market.
From the “abnormal” coffee price, worries about the new crop

From the “abnormal” coffee price, worries about the new crop

VCN - The Vietnamese coffee industry enters the new crop with the question of what is a reasonable price to ensure benefits for coffee growers while still retaining international consumers.
What obstacles limit the market share of Vietnamese goods in the UK?

What obstacles limit the market share of Vietnamese goods in the UK?

VCN - Vietnamese goods account for only about 1% of total imports into the UK market. One of the reasons is that they have not yet built their own brands and have not focused on effective strategies and approaches to market information.
Why seafood exports to some Middle Eastern Countries are stalled

Why seafood exports to some Middle Eastern Countries are stalled

VCN - Several shipments of seafood exported to certain Middle Eastern countries have been delayed due to legal challenges related to consular legalization procedures. This has created significant bottlenecks in accessing these markets.
Storm No. 3 destroys profits of many insurance companies

Storm No. 3 destroys profits of many insurance companies

VCN - Due to the impact of storm No. 3, the business results of the third quarter and the first 9 months of 2024 of the insurance sector have been significantly affected. This requires more efforts from businesses for the results of the whole year 2024.
Read More

Your care

Latest Most read
Agricultural, forestry and fishery trade surplus value shoots up

Agricultural, forestry and fishery trade surplus value shoots up

VCN - According to the Ministry of Agriculture and Rural Development, the total export turnover of agricultural, forestry and fishery products in the first 10 months reached 51.74 billion USD, up 20.2% over the same period in 2023. Notably, the trade surp
New export and business cooperation opportunities from "dual conversion"

New export and business cooperation opportunities from "dual conversion"

According to a recent study from NielsenIQ, 16% of Vietnamese consumers consider a sustainable future as one of the important factors in their consumption decisions.
VN

VN's food processing industry struggles to improve quality and value chain integration

Despite accounting for 19.1 per cent of Việt Nam’s processing sector, the food processing industry has been struggling with major issues such as poor-quality raw materials and subpar value chain integration, said industry insiders and economists.
Approach strategy of the seafood industry when implementing UKVFTA

Approach strategy of the seafood industry when implementing UKVFTA

VCN - Mr. Nguyen Hoai Nam, Deputy General Secretary, Vietnam Association of Seafood Exporters and Producers (VASEP), said that the advantage that UKVFTA brings is that the main products of the seafood industry enjoy 0% import tax to the UK, especially key
Mid-November: Vietnam

Mid-November: Vietnam's trade volume matches 2023 total, eyes record-breaking growth

By mid-November 2024, Vietnam's total import-export turnover reached an impressive US$681.48 billion, equaling the full-year trade figure for 2023
Mobile Version