Thailand’s FDI into Vietnam Reached 8.13 billion USD

By the end of March 2017, Thai investors had invested in 458 projects with a total registered investment capital of 8.13 billion USD, standing at the 10th position out of 115 countries and territories investing into Vietnam.

With the determination of the two Governments and the proactive of businesses, the economic cooperation between Vietnam and Thailand will grow strongly and reach the target of 20 billion USD in bilateral trade by 2020. Vietnam-Thailand trade relation has grown by more than 40% during the past five years. Specially in 2016, the growth rate continues to reach 10% with total turnover of nearly 13 billion USD. In the coming years, the two countries’ trade will increase as the two countries move towards the implementation of the ASEAN Free Trade Agreement and other general agreements.

On the Vietnamese side, as of January 1st 2015, Vietnam has cut its tariffs by 0% on more than 8,600 tariff lines. The remaining 669 tariff lines will be reduced to 0% by 2018. On the Thai side, currently more than 9,500 tariff lines under the tariff reduction schedule of the ATIGA have been fully abolished since 2012. In that context, the two sides should organize activities to promote trade and investment; continue to encourage Thai businesses to invest in Vietnam, support Vietnamese businesses to expand their business to Thai market, contributing to balance the trade balance.

In fact, Vietnam is Thailand’s second largest trading partner in ASEAN and Thailand is the largest trading partner of Vietnam. The two countries are located on the mainland with convenient transportation. The two countries also have open policies, implementing many measures to reduce barriers, facilitate the flow of goods.

Not only a major trading partner, Thailand is also one of the countries having cooperative investment with Vietnam very early, right after Vietnam implement the policy to open and attract foreign investment. In the past few years, Thai businesses have made specific plans to increase their investment capital in advantageous areas in Vietnamsuch as retail, building materials production, thermal power, animal feeds…

The establishment of the ASEAN economic community (AEC) is a great motivation for Thai investors to bring capital to Vietnam and expand their business area. Not only towards the market of 90 million people in Vietnam, Thai businesses are far more visionary to penetrate the AEC market with a population of 600 million and a total GDP of 3,000 billion USD.

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Foreign Investors Affirm That Vietnam Is Their Only Destination

Vietnam has become a production center for large projects and billions of dollars contracts to produce high value products, along with many commitments from Vietnam Government have inspired the business community to set up company in Vietnam.

According to representative of HSBC Vietnam, in the context of the world economy with a lot of political instability, Vietnam is emerging as a bright spot in the region with the advantage of competitive labor prices, stable political and macroeconomic. Many foreign investors have confirmed that they considered Vietnam as their only investment destination in the region and that they are still expecting to expand their investment in Vietnam.

Looking at Vietnam now is a country with rapid development plus the Government’s fierce policies and the waves of FDI into Vietnam have created great opportunities for both Vietnamese and foreign businesses.

A country can only develop sustainably when domestic enterprises also develop strongly and sustainably. In order to be able to develop and survive in the future, Vietnamese enterprises truly need to reform, improve their competitiveness, invest in technology for sustainable development, improve their management skills apply science and technology, actively participate in the supply chain of FDI enterprises. These are the problems if Vietnamese enterprises want to develop sustainably.

Finally, Vietnam has huge advantages compared with other countries in the region, based on low cost labor and the strong wave of FDI into Vietnam. This is the “golden opportunity” of Vietnam to be able to carry out reforms of the country. Investors are very hopeful that the Government will continue to reform to make Vietnam become a new tiger of Asia.

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