Binh Duong: FDI attraction surpasses yearly target Vietnam revises August FDI figures upwards

FDI inflows rose 8.4% from a year ago, a Planning and Investment Ministry report said on September 25, the highest level since late 1987 when a law was implemented to allow FDI to enter the Southeast Asian country.

FDI is an important source of foreign exchange for Vietnam, helping to boost its capital account and offset a trade deficit that had widened to an estimated US$3.9 billion so far in 2015.

New FDI pledges in the January-September period rose 44.5% from a year ago to US$11.03 billion, the ministry’s report said, citing major projects such as the US$2.4 billion Duyen Hai 2 thermal power plant.

Vietnam has embarked on liberal reforms to strengthen capital markets and position itself as a low-cost manufacturing alternative to China, especially for cell phones, televisions, footwear and garments.

New FDI commitments in manufacturing account for 70% of the total US$84.8 billion attracted by Vietnam between 2011 and August 2015, the Asian Development Bank said on September 22.

It raised Vietnam’s GDP growth forecast this year to 6.5% from 6.1% earlier, citing rising private consumption, export-oriented manufacturing and FDI.

Foreign firms expanding in Vietnam include Samsung, LG, Microsoft and Intel.

An additional US$3 billion placed by Samsung Display, a subsidiary of the world’s top smartphone maker Samsung Electronics Co Ltd, has helped boost the FDI inflow, the report said.

Samsung Display plans to put another US$3 billion into Vietnam by 2020.

Vietnam has projected drawing US$23 billion in FDI pledges in 2015, up nearly 40% from last year, while actual inflows are expected to be on par with 2014 at US$12.5 billion, the report said, citing Planning and Investment Minister Bui Quang Vinh.

Over the next five years, Vietnam aims to lift its growth rate to an annual average of 6.5-7.0% by capitalising on multilateral trade deals, modernising agriculture and boosting investments, its communist party has said.

Nine-month FDI soar spurred by large-scale projects

Newly-licensed large-scale projects spurred nine-month foreign direct investment (FDI) registered in Vietnam to soar 53.4 percent year-on-year to 17.15 billion USD in the first nine months, the Ministry of Planning and Investment revealed during a meeting on September 26.

The large-scale projects receiving licences in the reviewed period included Malaysia-invested Duyen Hai 2 thermo-electricity in southern Tra Vinh province capitalised at 2.4 billion USD and the 3 billion USD-expansion of Korean Samsung Display’s project in Bac Ninh Industrial Zone.

According to the ministry, as of September 20, the country granted investment licences to 1,432 new foreign-invested projects worth 11.03 billion USD, up 44.5 percent over the same period last year. Meanwhile, it also allowed 461 operating projects to raise their capital by 6.11 billion USD, surging 72.6 percent year-on-year.

During the period, the disbursement of FDI also witnessed a yearly encouraging rise of 8.4 percent to 9.65 billion USD.

In the period, foreign investors invested in 49 provinces and cities, with the Republic of Korea remaining the investment leader, followed by the UK, British Virgin Islands, and Hong Kong (China).

Manufacturing and processing retained their most attractiveness, and real estate came in second.

Earlier, Minister of Planning and Investment Bui Quang Vinh said Vietnam has set a goal of luring 23 billion USD in FDI this year with FDI disbursement expected to hit approximate 12.5 billion USD.