Japanese businesses flock to booming Viet Nam
02/05/2007 -- 5:46 PM
Tokyo (VNA) – The “Japan Times” on May 2 reported that Japanese companies are heavily investing in Viet Nam as a hedge against over reliance on Chinese investments, widely known as the China-plus-one strategy.
“Many Japanese companies are beginning to shift their production from China to Viet Nam based on the China-plus-one policy to diversify their investments and reduce their dependence on China,” the paper said.
Viet Nam, fuelled by the latest investment boom, is one of the world's fastest-growing economies. The country, which joined the World Trade Organisation in January 2007, has also achieved remarkable economic growth in recent years. In 2006, Viet Nam's economy grew by 8.2 percent and growth is projected at 8.3 percent for 2007, according to the paper.
The paper quoted figures released by the Japan External Trade Organisation (JETRO) as saying that Viet Nam attracted 9.22 billion USD in foreign investment for 2006, more than doubling the previous year’s figure.
According to the paper, preparations for its entry into the WTO accelerated the Vietnamese government's efforts to liberalise trade and facilitate foreign investment. The country's proximity to China and to fellow members of the Association of Southeast Asian Nations (ASEAN) also make it an attractive base for exporting to these markets, but the paper pointed to the country's skilled low cost labour force as a primary reason for continued investment by Japanese firms in the South East Asian nation.
A recent survey conducted by JETRO in November 2006 found that monthly salaries for workers ranged from 87 to 198 USD in Ha Noi and 122 to 216 USD in Ho Chi Minh City, as compared with 164 USD in Thailand and 134-446 USD in China's Guangzhou.
Takashi Kadokura, President of the Brazil, Russia, India and China Research Institute, was quoted as saying that while Viet Nam is still largely regarded as a manufacturing base, the country is beginning to attract attention as a huge potential market in its own right.
According to Kadokura, the potential of the market for consumer products such as cars, refrigerators and washing machines is huge, as only 15 percent of the population currently own them. -Enditem
