July 18, 2019 00:15

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FDI 2018: Going to new generation

16:29 | 09/01/2019

VCN- The attraction of foreign direct investment (FDI) is one of the remarkable highlights of economic development in 2018. Although the amount of attracted capital is not equal to 2017, but there have been many positive signs because this year, FDI capital in Vietnam has been initially developed according to the trend of quality rather than quantity. Instead of attracting massively, we now accept slow development to ensure sustainable development in the future.

tin nhap 20190107160916 FDI attraction in 2018 achieved nearly $US 35.5 billion, a decrease compared to 2017
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The clear changes

In 2018, Vietnam attracted more than 2,700 new projects and the attracted capital surpassed $ 30 billion. In 2018, 108 countries and territories have invested in projects in Vietnam, in which traditional partners continue to lead in investment in Vietnam. Japan ranked first, followed by South Korea and Singapore. Besides, the list of localities leading FDI attraction continues to recognize the position of key localities. In 59 provinces and cities that have foreign investment projects, Hanoi is the locality attracting the highest amount of investment capital with a registered capital total of USD 6.3 billion, followed by HCMC and Hai Phong. According to the assessment, FDI attraction is a bright spot in the picture of socio-economic development in 2018. This source of capital contributes not only to the total of social investment capital, but also to the export achievement of Vietnam. It accounted for more than 70% of export turnover total and boosted Vietnam's economic growth in 2018, fulfilling its goal.

If we compare with the results of FDI attraction in 2017, the attraction of FDI in 2018 has decreased. According to the assessment, the decrease of FDI attraction in 2018 has partly shown that FDI attraction has been selected and focused on efficiency and quality, ensuring the orientation of sustainable development and environmental protection. According to Assoc. Dr. Dinh Trong Thinh, Academy of Finance, FDI attraction has focused on attracting high-tech and future technologies, minimizing projects causing pollution such as thermal power, iron and steel production. ...

“We have had a relative shift in FDI attraction. This change was started at the end of 2016, but it has not been clear yet. By the end of 2017 and early 2018, this change was clear. The projects increased in areas such as smart cities, high-tech development .., which are encouraged areas, and this is also becoming a requirement in the 4.0 industrial revolution," Assoc. Dr. Dinh Trong Thinh said.

Evidenced by the Smart City Project in Hai Boi Commune (Dong Anh, Hanoi) with a total investment of US $ 4,138 billion invested by Sumitomo Corporation (Japan), expert Dinh Trong Thinh emphasized, although there is the decline in the amount of FDI capital compared to the previous year, but the quality of FDI attraction has been raised to a new level. In particular, it is consistent with our orientation to develop smart, high-tech technology, creating sustainable development for industries in particular and socio-economy in general.

tin nhap 20190107160916

Production activities at Samsung Company

(Photo provided by Samsung).

Rejecting the inappropriate project

One of the factors that show FDI attraction is in favor of quality is that FDI attraction still ensures the orientation to attract more in the field of manufacturing and processing industry, focusing on high technology projects and information technology provision, and for not adversely affecting the environment. Accordingly, in the fields of FDI attraction in 2018, the processing and manufacturing industry is still the area attracting the highest attention of foreign investors. The investment capital in this sector accounts for about USD 15 billion, equal to half of the total investment capital in 2018. Typically, the polypropylene project of (PP) and underground storage with liquefied petroleum gas (LPG) of Korean investors with a total registered investment capital of VND 1,201 billion USD in Ba Ria - Vung Tau. In particular, 2018 also recorded adjustments to increase capital in many large projects in the field of manufacturing and processing industry. Accordingly, the Hai Phong LG Innitek factory project (Korea) specializing in producing camera modules, adjusted to increase investment capital by USD 501 million. The Hai Phong LG Display project (Korea) also adjusted to increase investment capital by another 500 million USD.

It can be confirmed that in 2018, FDI inflows are slower but with more quality. 2018 is also the year Vietnam summarized 30 years of attracting FDI and developed a new generation of FDI attraction strategy with a proactive orientation towards quality capital flows. Accordingly, FDI attraction gradually shifted from incentives and solicitations, to selections suiting Vietnam's development needs, attaching importance to spreading and connecting with the domestic economy and increasing the added value of this capital flow.

From another perspective, according to Mr. Nguyen Van Toan, Vice Chairman of the Association of Foreign Investment Enterprises, FDI attraction reduced but disbursement of FDI capital continued to increase compared to the previous year. This is a positive signal that FDI continued to promote efficiency in practice, the more FDI capital given into production, the more the economy grew. According to data from the Ministry of Planning and Investment, FDI disbursement this year reached nearly 17 billion USD.

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Another signal that Vietnam is increasingly focusing on FDI’s quality is that some localities have rejected FDI projects that are likely to cause environmental pollution. Typically, Vinh Phuc province "said no" to the project of TAL Textile - Dyeing Factory with an investment of up to 350 million USD. Hai Phong City also rejected a paper production project with a total investment of up to 800 million USD. Commenting on this signal, expert Dinh Trong Thinh said that if we consider and select more carefully, the amount of attraction will be reasonable. There has been a shift in quality right from the attraction, we have selected, ready to reject inappropriate projects. This shows that we are brave and resolute enough, this is very remarkable. “This is one of the very clear and strong changes of the state management agency on investment from the central to local levels as well as the authorities at all levels in selecting projects. With that awareness, we will eliminate projects that are inconsistent with the new economic development period, creating a fundamental development, with effective industries to facilitate the country's economic development in the new era,” Assoc. Dr. Dinh Trong Thinh confirmed

By Hoai Anh/ Quynh Lan