Electronics and telecommunications are expected to be the hottest areas for UK businesses investing in Vietnam, thanks to the UK-Vietnam Free Trade Agreement.
At an online conference on investment promotion in early July, UK businesses – represented by the foreign direct investment (FDI) advisor of United Overseas Bank (UOB) Group Sai Chao Yong – confirmed interest in opportunities in core electronics and telecommunications.
Do Nhat Hoang, director general of the Ministry of Planning and Investment’s Foreign Investment Agency, chairman of the conference said that electronics and telecommunications investment increases by about 14 per cent each year, driven by big investors from the US, Japan, and South Korea. “They are always among the hottest areas for foreign investment in the past years,” he said.
Vietnam ranks 12th in the world in the manufacturing and processing electrical, electronics, and telecommunications products, and ranks third in ASEAN.
He emphasised that Vietnam has many advantages for the production and development of these products, including abundant, trained, skilled, and experienced labour force; and supporting factories of the industries.
Additionally, production costs in Vietnam are quite low compared to the region and logistics costs are reasonable. “‘Made in Vietnam’ goods have the advantage in price and reputation in the world market,” affirmed Hoang.
At the conference, the UOB representative lauded the positive growth of Vietnam in 2020 and expressed expectations of a V-shaped recovery.
Hoang from the MPI highlighted that Vietnam has been implementing the “dual goal” of combating the COVID-19 pandemic and promoting socioeconomic development. The country’s GDP grew by 2.91 per cent in 2020 and 5.64 per cent in the first half of this year.
“With the global supply chain disrupted, Vietnam has a lot of advantages due to expansive network of 13 free trade agreements in effect,” he emphasised, adding that the company has been preparing the necessary conditions to attract investment, including land, human resources, and incentives.
As of date, 140 countries and territories are investing in Vietnam with 33,787 projects and $398 billion in accumulated registered capital. In the first half of the year, total newly registered and added capital, as well as capital contributions and share purchases amounted to $15.27 billion.
Of this, the UK ranks 15th among 140 countries and territories investing in Vietnam, with a total investment of $3.9 billion and 424 projects. The largest proportion of this went into the processing and manufacturing industries with 118 projects and $1.5 billion, followed by real estate, mining, as well as wholesale and retail, among others.
The UK is one of the most important partners of Vietnam, especially since the two countries have just signed the UK-Vietnam Free Trade Agreement last December. Vietnam is also calling investment into renewable energy, processing and manufacturing, biotechnology, in addition to electronics and telecommunications.