Stable growth in foreign inflows despite global dips

In June alone, Vietnam welcomed newly-licensed projects and new funding commitments from big players. Foxconn Singapore announced it would invest an additional $400 million to expand the plant in Nam Son-Hap Linh Industrial Park, located in the northern province of Bac Ninh.

The complex is also the production destination of Goertek Group’s $280 million plant, currently being constructed.

The factory will specialise in manufacturing and assembling circuit boards, with a total capacity of 2.79 million items per year. At present, Foxconn has five facilities in Vietnam, worth around $4 billion in total.

The group continues to expand its activities in Vietnam, with a focus on computing products. In mid-June, it announced a partnership with Nokia to produce its 5G AirScale equipment at its factory in the northern province of Bac Giang. Production is scheduled to begin in July, with a plan to increase production in September.

Another subsidiary, ShunSin Technology, is planning to open a new subsidiary in Vietnam, costing $20 million. “We are honoured to accelerate the collaboration with Nokia to produce the modernist 5G models in facilities in Vietnam. This move shows that Vietnam is a favourable investment destination for production activity,” said a representative of Foxconn.

Last week, Brand Cheng, president and CEO of Foxconn, held a meeting with Prime Minister Pham Minh Chinh alongside a World Economic Forum meeting in China. During the trip, the PM also met with the leader of PepsiCo, which has plans to expand investment, especially in agriculture and food processing.

Meanwhile, a number of agreements were signed during Russian President Vladimir Putin’s visit to Vietnam. As part of the document exchange ceremony, Vietnam’s Minister of Industry and Trade approved development of Block 11-2 on the Vietnamese continental shelf to the general director of Zarubezhneft Sergei Kudryashov JSC. Its subsidiary, ZN EP Vietnam, had been named as the project operator.

In addition, a MoU on cooperation in Vietnam was signed between Novatek and PetroVietnam Oil and Gas Corporation during the visit.

Foreign direct investment (FDI) in Vietnam during the first half of the year has reached $15.51 billion, a 15 per cent increase compared to the same period in 2023, according to data from the Foreign Investment Agency under the Ministry of Planning and Investment.

Singapore is the country’s largest foreign investor in the first six months with total capital of $5.73 billion, followed by Japan with $1.75 billion, Hong Kong with $1.73 billion, South Korea at $1.46 billion, and China with $1.33 billion.

Nguyen Dinh Nam, CEO of IPA Vietnam, said that foreign-invested capital will mostly come from Taiwanese investors involved in electronics, electric vehicles, and semiconductors in the near future.

“Investment capital will also be poured into renewable energy, AI, high-tech agriculture, and finance. The renewable sector is forecasted to attract the most investment from overseas because Vietnam has strongly committed to net-zero targets by 2050 and environmental protection,” Nam said.

There is a general decrease in global FDI this year so far. In late June, UN Trade and Development’s World Investment Report indicated that global FDI flows declined by 2 per cent to $1.3 trillion for the year. In developing countries, they fell by 7 per cent to $867 billion. The decline is driven by increasing trade and geopolitical tensions in a slowing global economy, the report said.

While the prospects for FDI remain challenging in 2024, the report added that modest growth for the full year “appears possible”, citing the easing of financial conditions and concerted efforts towards investment facilitation.

“With the global push to attract and retain financial flows, online information portals and single windows have proliferated to foster a conducive business and investment climate,” it said.

Northern Quang Ninh province has attracted more than 1.52 billion USD worth of foreign direct investment (FDI) in the first half of this year and is poised to reach its goal of 3 billion USD in FDI for the full year.

In the first six months of 2024, foreign direct investment (FDI) flowing into Hanoi increased by 52 per cent over the same period last year, and economic indicators also recorded many positive results.

In the first half of the year, foreign direct investment (FDI) reported an increase of 13.1 per cent, while FDI disbursement also surged by 8.2 per cent on year.