HANOI: Vietnam is poised at the cusp of another significant wave of foreign investments, spurred by enhanced diplomatic ties, a robust infrastructure upgrade, a skilled workforce, and a conducive investment environment.
Rising Diplomatic Ties Stimulate Investment
In a recent report, Nikkei Asia indicated that Vietnam might be witnessing its fourth significant surge of foreign investments, with a significant push coming post U.S. President Joe Biden’s diplomatic visit to the nation. This new phase of engagement between the two countries was further solidified with the declaration of a comprehensive strategic partnership.
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Strengthened U.S.-Vietnam Relations
The momentum post-President Biden’s visit didn’t wane. Vietnamese Prime Minister Phạm Minh Chính, during his subsequent six-day U.S. visit, advocated for major U.S. firms to consider Vietnam as a potential investment and production hub. His tour included significant stops at global behemoths like Nvidia, with Chính emphasizing the benefits of the tech giant setting up a production base in Vietnam.
Moreover, the Prime Minister’s engagements with major U.S. corporations such as Microsoft, Meta, SpaceX, Coca-Cola, and Pacifico Energy highlighted Vietnam’s shift in focus. The country is keen to transition from its historical reliance on labor-intensive sectors, directing attention towards manufacturing, tech, renewable energy, aviation, and innovation.
Tracing Back Vietnam’s Foreign Capital Milestones
For context, Vietnam has historically seen three pivotal foreign investment surges:
- The initial influx was back in 1997, catalyzed by Japan’s Honda Motor commencing local production of two-wheelers. This was a decade after Vietnam introduced its Law on Foreign Investment.
- The early 2000s marked the second phase, continuing until the 2008 global financial crisis. A standout during this period was South Korea’s Samsung Electronics, which established a mobile phone production base in Bac Ninh.
- The third wave is recognized to have peaked around the mid-2010s.
With the series of recent events and engagements, industry experts are now keenly observing if this is the onset of the fourth investment boom in Vietnam.
