US investment flow into Vietnam opens up new opportunities

A nice surprise is that ahead of the visit of Prime Minister Nguyen Xuan Phuc to the US from May 29-31, Jabil Circuit, Inc., a major American technology corporation, had commenced the construction of a new manufacturing workshop at the Saigon Hi-tech Park (SHTP).

Jabil started operation at the SHTP from September 2007, specialising in the production of electronics and equipment for information technology and telecommunication with the initial capital of only US$30 million. However, in 2011, the corporation decided to increase investment to US$100 million.

In 2015, Jabil once again announced to expand investment in Vietnam, focusing on the field of high technology.

“Since we began operations in Vietnam ten years ago, we have been on a consistent growth trajectory. We are currently operating at maximum capacity and this expansion is central to our growth strategy. Besides positioning us well for future growth, this expansion also reflects our continued commitment to develop and invest in Vietnam,” said Vijay Chinnasami, senior vice president of electronic manufacturing services (EMS) operations at Jabil.

Jabil is among US investors to pledge for long-term operation in Vietnam. Other US big investment projects include the Ho Tram Strip with a total registered capital of US$4.2 billion being carried out in southern Ba Ria – Vung Tau province.

Minister of Planning and Investment Nguyen Chi Dung repeated such big names as Intel, GE, Boeing, Coca-Cola, Nike, Microsoft, Citi Group, P&G, and Mobil while highlighting the significant contributions of US investors to the renovation, integration, and economic development of Vietnam.

As of May 20 this year, the US counted 838 investment projects worth over US$10.2 billion in Vietnam. The US is ranking ninth among countries and territories investing in Vietnam.

A series of US businesses like Nike, Adidas, Intel and Microchip plan to shift production to Vietnam, while ExxonMobil – a major US oil and gas group – moves to prepare for the implementation of the Blue Whale project to bring gas onshore, with a committed capital of nearly US$10 billion.

At recent workshops on Vietnam-US prospects in 2017 and the following years in Hanoi and Ho Chi Minh City, a large number of US companies affirmed to increase investment in Vietnam.

“We are working to find concrete ways to strengthen the bilateral trading relationship, including the possibility of a bilateral free trade agreement, in order to support economic growth in both countries,” said Tami Overby, senior vice president for Asia of the US Chamber of Commerce (Amcham).

Meanwhile, AmCham Executive Director Adam Sitkoff expressed his confidence in the upward growth trend of trade and investment relations between Vietnam and the US.

“AmCham supports a path towards a US-Vietnam free trade agreement which would help increase bilateral trade and investment, and which would create wealth and job opportunities for people in both countries,” he said.

Regarding the ongoing visit to the US by Prime Minister Nguyen Xuan Phuc, Minister Nguyen Chi Dung said this event holds a significant meaning to elevate the bilateral comprehensive partnership to a new height.

This is an excellent opportunity for Vietnam to boost trade and investment relations with the US, he said, adding that 80-90 Vietnamese businesses are accompanying the PM to seek new cooperation agreements.

The two countries’ leaders are scheduled to hold talks to discuss measures to promote the bilateral comprehensive partnership in the coming time, especially in the fields of politics, external affairs, economics, and trade.

Vice President of AmCham Michael Kelly told Dau tu reporters that the US business community is much awaiting the PM’s visit.

“My experiences suggest that the Vietnamese government is committed to implementing reforms and supporting American and Vietnamese business operations. I have received reassurances that there would be a level playing field for US investments in Vietnam as part of a mutually beneficial trade relationship.”