During the past year, the number of Japan-backed projects granted licences in Vietnam reached 208, up 82 percent from 2010, according to the Japan External Trade Organisation (JETRO). The manufacturing sector accounted for 54 percent of total projects, mostly producing construction machines, automobile spare parts and electronic components. Trade and service businesses made up 15 percent of the projects, including top Japanese retailer Ministop.

Vietnam has attracted Japanese investors with low production costs, but also cultural similarities, according to Than Thanh Vu, chairman of the Sao Khue investment consultancy firm.

In recent years, the Vietnamese Government has encouraged Japanese businesses to increase investment in the country's support industries and commit to establishing Japanese-only industrial zones (IZs).

The Government plans to build two IZs specifically for Japanese investors in the northern port city of Hai Phong and southern Ba Ria-Vung Tau province, where streamlined administrative policies and specialised infrastructure will be available. Experts have indicated there will be a new wave of investment from Japanese companies as the country rebuilds after last year's devastating earthquake-tsunami.

Vietnam will continue programmes to attract Japanese investors, said the Minister of Planning and Investment Bui Quang Vinh, adding that Japan had always been strategically aligned with Vietnam in economic development