The Director of Japan’s External Trade Organization (JETRO) in Ho Chi Minh City Yoshida Sakae has recommended that Vietnam prioritizes developing its supporting industries to attract investors.
Sakae said that the number of Japanese businesses investing in Vietnam only represents one-seventh of the amount that invests in Thailand as the nation’s supporting industries do not yet meet Japanese businesses’ requirements.
The availability of domestic suppliers is of special concern to Japanese businesses before they invest, he said.
According to Sakae, attracting investment and developing supporting industries are in Vietnam’s best interests. Under commitments to the World Trade Organization and the agreement to establish the ASEAN Free Trade Area (AFTA), Vietnam will abolish tariffs by 2015.
However Vietnam’s young automobile and computer industries which depend on imported parts cannot compete with foreign products, he said.
Sakae emphasized the necessity for Vietnam to have a sound investment policy for supporting industries with a special focus on mechanical engineering, steel, plastics and machine parts.
On Japanese businesses’ investing in Vietnam , Sakae said that Vietnam could be an alternative attractive destination as a number of Japanese businesses are intending to leave China due to the increasing amount of strikes and rising production costs in the country.
JETRO’s statistics revealed that there are more than 1,000 Japanese businesses currently investing in Vietnam.
Apart from light industry, assembly plants and infrastructure development, Japanese businesses are also involved in oil refining, steel, trade and retail services.
He forecast that Japanese businesses will get involved in every industry in Vietnam.
The Vietnamese Ministry of Planning and Investment says that by July 2010, Japan had 1,244 valid projects with a total combined capital of nearly US$19.6 billion, ranking third amongst foreign investors in Vietnam.
