Foreign Direct Investment (FDI) commitments in the first half of 2022 reached over US$14.03 billion, equivalent to 91.1% of the same period last year, a report of the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment has shown.
| Production at Rhythm Precision in the Noi Bai Industrial Park, Hanoi. Photo: Pham Hung|
In the six months, 752 new projects have been approved with total registered capital of $4.94 billion, down 6.5% in the number of projects and 48.2% in capital year-on-year, while 487 existing projects have been injected an additional $6.82 billion, up 5.9% in number and 65.6% in capital.
Meanwhile, 1,7077 projects had nearly $2.27 billion contributed by foreign investors, which was down 8% in several projects, but up 41.4% in value year-on-year.
Investors have poured money into 18 out of 21 economic fields and sectors, in which manufacturing and processing led the pack with investment capital of $9 billion, accounting for 63% of total registered capital. Real estate came second with $3.15 billion, or 22.5%, followed by information and communications with $442.6 million.
Among 49 cities and provinces having received FDI in the period, the southern province of Binh Duong has attracted the largest portion commitments with $2.53 billion, or 18% of the total. Ho Chi Minh City ranked second with over $2.2 billion (15.8%), followed by Bac Ninh with $1.63 billion (11.7%).
The FIA, however, noted the majority of new projects are concentrated in major cities with advantages in infrastructure systems, such as Ho Chi Minh City, or 40.4% of the new projects, and Hanoi, 14%.
The report added that out of 84 countries and territories having projects in Vietnam in the first half of 2022, Singapore took the lead with $4.1 billion, or 29.5% of the total newly registered FDI projects, followed by South Korea with $2.66 billion, or 19%, and Denmark with US$1.32 billion, or 9.4%.
While South Korea stood second in terms of FDI capital the country, it claimed the top spot in terms of new projects and projects with capital increases, making up 21.3% of the total new projects.
Attractive investment destination for multinationals
German-based DW reported Vietnam has drawn the attention of international firms seeking to shield from a combination of geopolitical tensions, rising operational costs thanks to the country’s strong economic performance in recent years.
German automotive supplier Brose, which has 11 factories in China, is currently deciding between Thailand and Vietnam for a new production location.
Last December, Denmark's Lego announced it will build a $1 billion (€935 million) factory near the southern business hub Ho Chi Minh City, one of the largest European investment projects in Vietnam to date.
In February, Samsung announced an injection of US$920 million to expand its production capacity in Vietnam, taking its total investment in the country to over $19.2 billion, and remained the largest foreign investor.
Nikkei Asia in an article published in late June also noted Apple for the first time is moving some iPad production out of China with Vietnam as the destination.
In this regard, China's BYD, one of the leading iPad assemblers, has helped Apple build production lines in Vietnam and could soon start to produce a small number of the iconic tablets there, it reported.
"It currently looks as if, in particular, medium-sized companies are increasingly striving to enter the Vietnam market or are putting their activities out of China on a broader basis," said Daniel Müller, manager at the German Asia-Pacific Business Association, was quoted on the DW as saying.
Meanwhile, Raphael Mok, head of Asia Country Risk at Fitch Solutions, expected Vietnam to stay among the front-runners when businesses, particularly those in the labor-intensive manufacturing segment, have been looking to relocate out of mainland China to other lower-cost countries.