64% of Japanese firms want to expand business in Vietnam: Jetro
About 64 percent of Japanese enterprises plan to continue expansion of their business in Vietnam due to its favourable investment environment.
A production line of a Japanese company
in Viet Nam. About 64 per cent of Japanese firms expect to expand their business in the country. — Photo daidoanket.vn
About 64 per cent of Japanese enterprises plan to continue expansion of their business in Viet Nam due to its favourable investment environment. Chief Representative of Jetro Ha Noi Takeo Nakajima presented the figure as part of the Japan External Trade Organisation (Jetro)'s survey on Japanese investment in Asia and Oceania 2019 to Deputy Minister of Industry and Trade Do Thang Hai at their meeting on Thursday in Ha Noi.
The Japanese enterprises will continue to expand their businesses in Viet Nam based on revenue growth, development ability, stable production and consumption network, low cost, labour resources, regulations and business procedures.
Takeo Nakajima was quoted by the Cong thuong (Industry and Trade) newspaper as saying: “The investment environment in Viet Nam has many advantages for Japanese businesses, such as political and social stability, ideal living environment for foreigners and cheap labour costs."
According to this survey, 65.8 per cent of Japanese enterprises doing business in Viet Nam have been profitable, especially the manufacturing sector, which accounts for 80 per cent of profitable firms.
The number of newly established Japanese businesses has also increased in Viet Nam.
However, the representative of Jetro Hanoi also raised concerns that there are many risks for Japanese enterprises in Viet Nam, including rising labour costs, and complicated administrative procedures and tax regulations.
Jetro's survey also showed that Japanese companies have increased purchases of raw materials from Vietnamese enterprises since 2010. However, 56.2 per cent of Japanese enterprises still face difficulties in buying accessories and raw materials from local firms.
At present, Japanese enterprises in Viet Nam are still very concerned about issues relating to production and business activities, such as costs, administrative procedures and localisation rate, but they hope to develop their business here, he said.
In addition, Jetro also says that in the future, Viet Nam and Japan can promote cooperation to improve productivity, including in robotics, IoT and AI applications. Start-ups of the two countries are expected to boost cooperation.
To create favourable conditions for Japanese enterprises, Jetro has proposed Viet Nam’s Government and the Ministry of Industry and Trade to remove existing difficulties and obstacles for Japanese investors, he said.
At the meeting, Deputy Minister Do Thang Hai said the ministry as well as other ministries will create more favourable conditions in production, business and investment for Japanese firms. While, Vietnamese businesses need to coordinate further with Japanese enterprises to take advantages of free trade agreements (FTAs).
Hai hoped that Japan would promote further cooperation in supporting industries to improve production capacity and raise the localisation rate in Viet Nam.
He said at present, the coronavirus epidemic has seriously affected Viet Nam's exports to China, so Viet Nam expects to promote trade activities between Viet Nam and Japan. — VNS
Japanese fashion brands are swooping into Vietnam as local consumers become more brand-sensitive as they grow prosperous.
Tidy profits have motivated around 64 percent of Japanese firms in Vietnam to consider expanding their business in the Southeast Asian country, according to the Japan External Trade Organisation (JETRO).