JETRO: Many Japanese enterprises want expanded presence in Vietnam
More and more Japanese firms want to expand their operations in Vietnam, said Hironobu Kitagawa, Chief Representative of the Japan External Trade Organization (JETRO) in Hanoi.
Some 70% of heads of Japanese enterprises expressing their desire to do so based on JETRO’s 2017 survey on international operations of Japanese firms, annouced this morning.
Last year, 65.1% of Japanese businesses operating in Vietnam reported profits of over 2.3 points over the 2016 figures. Some 88% of survey participants reported rising revenue while 46% highly value Vietnam economic growth potentials, given the country’s market size, growth, stable political and social state of affairs, and cheap labor cost.
Hironobu Kitagawa (R), Chief Representative of the Japan External Trade Organization (JETRO) in Hanoi.
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“Vietnam retains its position as an important investment hub for Japan companies”, Kitagawa explained. The head of JETRO Hanoi also believes that in 2018, Japanese firms will increase investments in Vietnam in other sectors besides traditional areas such as processing and manufacturing. “Figures from 2016 until now have proved an emerging trend that Japanese companies in services and high-tech agriculture are heading to the country more and more”, Kitagawa told Hanoitimes.
Many Japanese enterprises view the labor force and product quality as the strength of the Vietnamese market.
Nonetheless, the JETRO head in Hanoi also pointed out the risks in Vietnam’s investment climate. More than 60% of Japanese enterprises view high labor costs as an obstacle, while over half of them want a more comprehensive legal system and greater transparency.
The Japanese firms also expressed concern over administrative procedures and expect improved infrastructure in Vietnam, the survey found.
The latest survey was conducted with nearly 12,000 Japanese enterprises in 20 countries and territories in Asia and Oceania from October 10 to November 10, 2017. In Vietnam, 1,345 Japanese firms participated in the survey. This was the biggest participation of Japanese firms in Vietnam among ASEAN nations.
Last year, Japan replaced South Korea as the largest foreign country or territory investing in Vietnam as the Southeast Asian nation’s multi-billion dollar projects continue to attract investment from overseas. Japanese investments more than tripled to a record $9.11 billion, accounting for a quarter of the total FDI to Vietnam at US$35.8 billion.
