FDI inflows drop 15.1 percent year on year in first half
Vietnam recorded a year-on-year decrease of 15.1 percent in foreign direct investment (FDI) inflows to 15.67 billion USD as of June 20, according to the Ministry of Planning and Investment (MPI).
The Sapporo Vietnam beer factory in the southern province of Long An (Photo: VNA)
The value included 8.44 billion USD registered for 1,418 new projects, over 3.7 billion USD added to 526 existing projects, and 3.51 billion USD spent on contributing capital to or purchasing shares of domestic firms.
Among 18 sectors receiving foreign capital, the processing – manufacturing industry attracted the most – more than 8 billion USD or 51.1 percent of the total. It was followed by electricity production and distribution (3.95 billion USD, or 25.2 percent), wholesale – retail (1.08 billion USD), and real estate (nearly 850 million USD).
Meanwhile, 98 countries and territories invested in Vietnam during the period. The largest investors were Singapore (5.44 billion USD, equivalent to 34.7 percent of the total), Thailand (1.58 billion USD, 10.1 percent), and China (1.58 billion USD, 10.1 percent), followed by Japan, the Republic of Korea, and Taiwan (China), statistics show.
Foreign investors channeled capital into 57 provinces and centrally-run cities, with Bac Lieu province the top destination (4 billion USD, 25.5 percent of the total), followed by Ho Chi Minh City (over 2 billion USD, 12.9 percent), Ba Ria – Vung Tau province (1.95 billion USD, 12.4 percent), Hanoi, Binh Duong province, and Hai Phong city.
In its report, the MPI also pointed out that exports by the FDI sector in the first six months declined in both value and their proportion in Vietnam’s total overseas shipments, estimated at 79.8 billion USD (including crude oil) – equivalent to 93.3 percent of the figure in the same period last year and 65.9 percent of the country’s total figure, and 79 billion USD (excluding crude oil) – equivalent to 93.6 percent of the figure in the same period last year and 65.2 percent of the six-month value.
This sector’s imports stood at 65.6 billion USD, representing 94.6 percent of the figure in the same period last year and 56 percent of the country’s total imports in the first half of 2020.
FDI firms still posted a trade surplus of 14.2 billion USD, including crude oil, and 13.4 billion USD, excluding crude oil, during the period. That helped make up for the deficit of nearly 10.2 billion USD in the domestic sector, contributing to Vietnam’s trade surplus of over 4 billion USD during the six months, the MPI noted.
IPs, EZs attract US$6 billion despite Covid-19
Even though the pledged capital of foreign investors from January to June was not as high compared with the same period last year, industrial parks (IPs) and economic zones (EZs) nationwide managed to attract 335 foreign-invested projects worth some US$6 billion in the first half of the year, according to the Ministry of Planning and Investment.
This is still a positive sign amid the spread of Covid-19 worldwide, which has led to producers and multinational companies halting their production expansion or investment plans.
Besides, the suspension of international air services over the past few months has hindered investors from coming to Vietnam to learn about the market or promoting investments.
However, the number of projects getting licensed in the six-month period is almost similar to that of the same period last year.
IPs and EZs across the country attracted some 340 foreign-invested projects in January-June of last year with fresh capital totaling US$8.7 billion.
The country has recorded 9,835 foreign-invested projects worth US$197.8 billion at IPs and EZs to date and realized capital has reached 72.3%.
As for domestic investments at IPs and EZs, there were 282 projects whose combined fresh and additional capital was some VND62.7 trillion. Meanwhile, the same period last year witnessed 334 such projects with fresh capital recorded at some VND82.900 trillion.
The number of domestic projects at IPs and EZs has so far reached 9,650 with combined investments totaling VNDVND2,310 trillion. Compared to foreign-invested projects, the realized capital of domestic investments is much lower, at around 46.3%.
As of this month, Vietnam has 336 IPs covering 97,800 hectares. Of these, 261 have been put into operation and 75 others are in the site clearance and compensation phases. The occupancy rates at operational IPs are some 76%.
In addition, there are 17 coastal EZs whose combined land and water surface sizes amount to more than 845,000 hectares, while over 40,000 hectares of land at EZs has been leased.
Among 38 IPs covering 16,600 hectares inside EZs, there are 20 IPs operational and 18 IPs under construction. VNA/SGT
Foreign enterprises are beginning to shift their investments into industries that require medium-level workers or higher-skilled workers as opposed to putting money into labour-intensive industries as in the past,