70th anniversary of Hanoi's Liberation Day Vietnam - Asia 2023 Smart City Summit Hanoi celebrates 15 years of administrative boundary adjustment 12th Vietnam-France decentrialized cooperation conference 31st Sea Games - Vietnam 2021 Covid-19 Pandemic
Home / News / Viet Nam
Vietnam urged to look beyond Asian markets for FDI amid Covid-19
Hai Yen - Thao Nguyen 11:35, 2020/03/03
Vietnam should take advantage of being the second country in Southeast Asia to sign a free trade agreement with the EU to attract FDI from Europe.

As of present, the majority of foreign direct investment (FDI) and foreign indirect investment (FII) inflows to Vietnam are from Asian countries. Vietnam, therefore, should look for other markets as the Covid-19 epidemic is wreaking havoc in the region, with EU being an attractive option, Kinh te & Do thi quoted an expert as saying.

 Data: GSO. Chart: Ngoc Thuy. 

In addition to a long break from the Lunar New Year Holiday, the Covid-19 epidemic is one of the main reasons leading to a decline of 23.6% year-on-year in FDI commitments to Vietnam in the January – February period, which stood at US$6.47 billion, data from the Foreign Investment Agency under the Ministry of Planning and Investment has shown. 

During the period, disbursements of FDI projects in the country totaled US$2.45 billion, representing a decline of 5% year-on-year.

Nevertheless, inflows from Vietnam’s major FDI partners such as China, South Korea, Hong Kong and Japan are still growing in the two-month period. Out of 73 countries and territories investing in Vietnam in the period, Singapore took the lead with US$4.12 billion, China came second with US$720.4 million, while the third place belonged to South Korea with US$425.4 million, followed by Hong Kong, Taiwan and Japan.

However, things could change dramatically in March as those economies are still struggling to contain the deadly coronavirus, said the expert.

With the EU – Vietnam Free Trade Agreement (EVFTA) in place, Vietnam becomes an attractive destination for European investors, which is particularly significant as most countries in the Southeast Asian region do not have a similar deal with the EU.

However, as Member of the European Parliament Iuliu Winkler openly said a trade deal with ASEAN is the bloc’s “long-term ambition”, and the EVFTA is the first step towards this target, the two sides are predicted to eventually set for such a trade deal. 

The deal would inevitably diminish Vietnam’s advantage as the EU’s FTA partner. It is, therefore, vital for Vietnam to utilize the current “golden period”, when a potential EU – ASEAN trade deal is still on papers, to penetrate EU market and attract FDI from European investors, the expert suggested.

Meanwhile, experts from Hanoi-based lender BIDV said the impacts of Covid-19 on FDI inflows to Vietnam would only be temporary. While Vietnam is effectively containing the epidemic, the contrasting situation in other countries could push investors in China and its territories such as Hong Kong and Macau to move to Vietnam.

RELATED NEWS
TAG: Vietnam FDI China South Korea Japan covid-19 Hong Kong coronavirus nCoV EVFTA EU
Other news
14:13, 2024/06/14
Vietnam news in brief - June 14
Check out the latest events in Vietnam for today.
14:27, 2024/06/13
Vietnam news in brief - June 13
Read The Hanoi Times to keep up with the latest developments in the country.
14:32, 2024/06/12
Vietnam news in brief - June 12
Keep updated with the latest news about Vietnam on The Hanoi Times.
14:03, 2024/06/11
Vietnam news in brief - June 11
Check out the latest events in Vietnam for today.
14:27, 2024/06/10
Vietnam news in brief - June 10
Check out the latest events around Vietnam for today.
12:07, 2024/06/09
Vietnam news in brief - June 9
Keep updated with the country's news on The Hanoi Times.