Foreign Direct Investment (FDI) commitments in 2021 rose by 9.2% year-on-year to over US$31billion, a report of the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment has shown.

Production of electronics at Quang Minh Industrial Park, Me Linh District. Photo: Chien Cong

This year, nearly 1,740 new projects have been approved with total registered capital of $15.2 billion, down 31.1% in the number of projects but up 4.1% in capital year-on-year, while 985 existing projects have been injected an additional $9 billion, falling 13.6% in number but rising by 40.5% in the capital. 

Meanwhile, 3,797 projects had nearly $6.9 billion in capital contributed by foreign investors, which were down 38.2% in a number of projects and 7.7% in value year-on-year.

The FIA noted a decline in the number of new projects and investment capital pumped into existing ones came from investors’ concern of possible disruption in the global value chains, which is reflected by a sharp drop in projects in fields with high integration into the value chains such as electronics, automobile, and chemicals.

“The fierce competition among countries in attracting FDI is also a key factor, especially among emerging and developing economies,” it added.

The FIA, however, stressed the figure lower than that of last year was also due to the fact that Vietnam has been more selective in attracting high-quality FDI projects.

In addition, the pandemic and strict countermeasures have limited opportunities for foreign experts and companies to visit  Vietnam to proceed with new projects.

The report added that out of 106 countries and territories having projects in Vietnam in 2021,

Singapore took the lead with $10.7 billion, or 34.4% of the total newly registered FDI projects, followed by South Korea with $5 billion, or 16%, and Japan with US$3.9 billion, or 12.5%.

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.

Investors have poured money into 18 fields and sectors, in which manufacturing and processing led the pack with investment capital of $18.1 billion, accounting for 58.2% of total registered capital. Electricity production and distribution came second with $5.7 billion, or 18.3%, followed by real estate with $2.6 billion.

Among 58 cities and provinces having received FDI in the period, the northern port city of Haiphong has attracted the largest portion of capital commitments with $5.26 billion, or 16.9% of the total. Long An came second with nearly $3.9 billion (12.3%), followed by Ho Chi Minh City (HCMC) with $3.74 million (12%).