Vietnam’s FDI Inflows Rise to US$4.8 Billion in April

FDI disbursed in the first four months of 2017 shows a strong year on year growth with inflows rising to US$4.8 billion, up 3.2 percent from the same period last year for a total of 734 newly registered projects. The total registered and additional capital in the first four months witnessed a jump of 40.5 percent, reaching US$10.95 billion. The growing numbers prove the increasing confidence of foreign investors in the country’s investment climate.

FDI firms lead in exports

Over the years, FDI firms have contributed significantly to the export-led economy. Despite a slight fall in April, export turnover for the first four months of the FDI firms increased 16.1 percent for the same period last year, reaching US$44.05 billion. FDI sector exports accounted for 71.82 percent of the total value. The country had one of the highest export-to-GDP ratios in the world in 2016, at around 90 percent.

Investment sectors

Continuing the trend, manufacturing and processing sector attracted the highest FDI with US$7.36 billion, accounting for 69.53 percent of the total inflows. Mining and retail sales follow with investments reaching US$1.28 billion and US$546.68 million, making up 12 percent and 5.16 percent, respectively. The largest investment project to receive government approval in the first four months is the PetroVietnam project in Kien Giang Province worth US$1.27 billion.

Investment sources

South Korea invested US$4.05 billion, accounting for 38.25%, followed by Japan and Singapore at US$1.85 billion and US$1.1 billion respectively in the first four months.

Investment destinations

The northern province of Bac Ninh attracted US$ 2.7 billion, accounting for 25.51 percent of the total inflows. The southern provinces of Binh Duong and Kien Giang follow with investments worth US$1.53 billion and US$1.28 billion respectively.

Going forward, Vietnam with wages almost a third of China, will continue to offer investors a low-cost alternative to China. The manufacturing sector will grow significantly with the opening of new FDI factories, while the construction industry will gain from the increase in public investments in the energy and transport sectors. The next few years, Vietnam has to move up the manufacturing value chain and attract investments in sectors such as high-tech, mechanical engineering, information, and communication technology, pharmaceuticals, environmental protection, and renewable energies for a sustainable growth.

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