Vietnam deemed active location for further American investment

Ted G. Osius, president and CEO of the US-ASEAN Business Council (USABC), told VIR that US companies are demonstrating more interest in the Vietnamese market than ever before, with the country strongly advancing in global supply chains.

“American businesses are here to boost investment and business activities in Vietnam, which we find a very active location for manufacturing and with foreign funding continuing to flow into Vietnam,” said Osius, who was US Ambassador to Vietnam in 2014-2017.

In response to the policy of safe, flexible adaptation and effective control of the pandemic for Vietnam’s socioeconomic recovery and development, the USABC last week organised a senior executive business mission and a health/life sciences mission of the council to Vietnam, with participation of 42 leading companies in the US.

The companies included 3M, Amway, Apple, Bank of America, Boeing, ExxonMobil, Google, Medtronic, Netflix, Nike, Roche, UPS, and Visa, among many others.

The delegation’s direct working visit to Vietnam showed a strong belief in Vietnam as a long-term and stable investment market and a leading reliable partner in the region of the US business community.

“Vietnam is an essential link in the global supply chain of goods for the United States, and US companies and investors have contributed significantly to the transformation and growth of Vietnam’s economy,” Osius said.

According to Vu Tu Thanh, deputy regional managing director and Vietnam representative for the USABC, Vietnam’s policies on reopening the economy with eased regulations on travelling has demonstrated the country’s political determination and “created bigger confidence for the foreign business community, including US businesses in Vietnam.”

On February 16, the Vietnamese government announced its goal to fully resume a visa issuance and waiver programme by March 15. With the plan, incoming tourists may only be required to have proof of vaccination or recovery from COVID-19 and a negative test result certificate issued within 24 hours of departure via a rapid test, or 72 hours with a PCR test. Most travellers will only be required to take a test prior to boarding and pay an insurance fee of around $30.

Michael W. Michalak, senior vice president and regional managing director of the USABC, told VIR that the council is working with Vietnam on how to support the country to attract high-quality investments that can lift Vietnam higher in global value chains.

“Many US companies are exploring opportunities to invest billions of US dollars in Vietnam,” said Michalak, who was US Ambassador to Vietnam in 2007-2011. “Many of them are applying state-of-the-art technologies for various projects in the sectors of agriculture, healthcare, and renewable energy, among others.”

Statistics from the Ministry of Planning and Investment showed that as of February 20, US investors registered $10.33 billion in Vietnam for nearly 1,150 valid projects, making the US the 11th largest foreign investor in the Southeast Asian nation.

During his September 2021 attendance in New York at the UN General Assembly, State President Nguyen Xuan Phuc hosted separate receptions for leaders of major US companies that want to increase investments in Vietnam, including GE Group, Cantor Fitzgerald, DeLong, Valero, AGP, and UPC Group. They said Vietnam is a dynamic market with great potential and hoped to expand their business and investment in the country.

President Phuc also witnessed the signing of an agreement worth nearly $2 billion between Vietnam’s Bamboo Airways and General Electric’s GE Aviation. Under the deal, the airline will purchase GENx engines, which will be delivered next year, to power its Boeing 787-9 Dreamliner aircraft and a maintenance package for its Boeing 787-9 fleet.

In October 2020, US firms inked more than $11 billion in commercial deals at the third Indo-Pacific Business Forum held in Hanoi.

“We have deepened our economic ties as Vietnam’s second-largest trading partner and its top export market worldwide, and our support for one another is mutually reinforcing: a vibrant Vietnamese economy is critical to the supply chains Americans depend on, a point that the pandemic has made clear when production shutdowns abroad have led to difficulties in shipping goods at home,” said a statement from the White House.

According to Vietnam’s General Statistics Office, bilateral trade between Vietnam and the US increased from $450 million in 1995 when the two countries normalised relations to $111.1 billion last year. By late last year, the US was Vietnam’s largest export market, with an estimated turnover of $95.6 billion, up 24.1 per cent on-year. The US was also Vietnam’s sixth-largest import market, with an estimated turnover of $15.5 billion, up 12.9 per cent on-year.

At the US-Vietnam Business Summit held last week in Hanoi, Marisa Lago, Under Secretary of Commerce for International Trade, expected that there would be great opportunities between both nations’ investment and trade ties this year. She highlighted some sectors prioritised by American firms for cooperating with Vietnam, including healthcare, digital commerce, energy, and climate change.

“We are building a plan to bring American medical delegations to Vietnam. We are also ready to introduce the leading US corporations in the energy sector to Vietnam,” Lago added.

In its new foreign investment attraction strategy, Vietnam will place a bigger priority on wooing high-tech projects. The USABC suggested that for Vietnam to attract more high-tech investment and high-quality investment, the country needs to have sound policies to foster innovation, ecosystems, and startups.

“Vietnam has a young population who are tech-savvy, industrious, and educated, and the government has started to have policies to support entrepreneurial spirit and startups,” Osius said. “In the past, US companies produced low-value products here, but in recent years they have been producing more products of high value and many companies in the delegations have invested billions of US dollars in Vietnam to produce such products.”