The Situation of Fdi in Vietnam

The situation of FDI in Vietnam Inflow of FDI In 1987, Vietnam for the first snip issued its ever first Law of FDI. Despite its relative short history, Vietnam has managed to suck up a substantial amount of money of FDI. In relative term, Vietnam has been quite in(predicate) as comp ared with other countries, ranking the third recipient in the ASEAN pic Firgure 1 FDI Inflow into Vietnam during 2000-2010 (source GSO) Figure 1 shows the overall trend of FDI inflows in Vietnam for stream 2000-2010.Together with the hail of investment projects, the amount of registered working slap-up for licensed projects were stagnant in the fourth first years of 20th deoxycytidine monophosphate which is generally referred to as the circumstance of World Crisis period in Vietnam. Beginning the year2004, the amount of registered big(p) had a sign of developing and the registered not bad(p) peaked in the 2008 and dropped aggressively subsequently when many multinational companies did not want to sell their particular(a) little corking as well as to focus on roof to reform their domestic enterprises seriously impact on Vietnamese economy.This phenomenon is most apparent in late 2008 and early 2009. Also, due to the find of the financial crisis and the contraction of the credit markets, transnational companies are affected a good deal or less. In 2008, merger and acquisition plans of transnational companies has declined 35%, mastered sharply from 2008. gibe to recently released statistics report of the Foreign investiture sanction also said that the implementation of FDI capital in 2011 is estimated at $ 11 billion, with the implementation of 2010 and contributed 25. 9% of the get along investment of the integral society.Do not achieve the plan (the plan is $ 11. 5 billion). Although only 74% compared to 2010, but this encounter is encouraging in the context of global economic and domestic difficulties. The amount of registered capital increased by $ 3. 1 b illion, 1. 65 times the registered capital increase in 2010 (1. 89 billion USD). This shows that foreign investors go forward electropositive reviews about business and investment environment in Vietnam. FDI made in 2011 is estimated at $ 11 billion, equivalent to 2010 and contributed 25. 9% of the extreme investment of the whole society. 2. 2 Sectoral distribution of FDITable 1 telephone number of projects Total registered capital( Mil carrying into action capital (Mil USD) USD) Total 14998 229913. 7 88945. 5 1988 37 341. 7 1989 67 525. 1990 107 735. 0 1991 152 1291. 5 328. 8 1992 196 2208. 5 574. 9 1993 274 3037. 4 1017. 1994 372 4188. 4 2040. 6 1995 415 6937. 2 2556. 0 1996 372 10164. 1 2714. 0 1997 349 5590. 7 3115. 0 1998 285 5099. 2367. 4 1999 327 2565. 4 2334. 9 2000 391 2838. 9 2413. 5 2001 555 3142. 8 2450. 5 2002 808 2998. 8 2591. 2003 791 3191. 2 2650. 0 2004 811 4547. 6 2852. 5 2005 970 6839. 8 3308. 8 2006 987 12004. 0 4100. 1 2007 1544 21 347. 8030. 0 2008 1557 71726. 0 11500. 0 2009 1208 23107. 3 10000. 0 2010 1237 19886. 1 11000. 0 Prel. 2011 1186 15598. 1 11000. 0 Table 2 Number of Total registered capital( projects Mil USD) TOTAL 13440 199078. 9 Agriculture, forestry and fishing 495 3264. 5 archeological site and quarrying 71 3015. Manufacturing 7661 94675. 8 Electricity, gas, stream and air conditioning fork out 72 7391. 6 Water supply, sewerage, waste management and remediation 27 2401. 9 activities Construction 852 10324. Wholesale and retail trade Repair of labour vehicles and 690 2119. 1 motorcycles Transporation and storage 321 3256. 8 Accommodation and food function activities 319 10523. 3 Information and communication 736 5709. Fiancial, banking and insurance activities 75 1321. 6 Real farming activities 377 48155. 9 Professional, scientific and technical activities 1162 976. 1 Administrative and support service activities 107 188. 0 Education and trainning 154 359. Hu man health and social work activities 76 1081. 9 Arts, entertainment and recreation 131 3602. 6 Other activities 114 711. 5 Table1 shows the total of foreign direct investment in each year from 1988 to early 2011 by the number of projects, the amount of registered capital and the amount of implemented capital for period 1988-2011.Table 2 gives further detailed breakdown by subsectors and by time period. As can be seen in the Table 1, the majorities of FDI inflows in Vietnam are into manufacturing in call of the number of project register capital and implemented capital as well. Table 1, with its detailed breakdown by smaller economic sectors and by time period provides a much richer picture of the trend of FDI into Vietnam. First, within the manufacturing, while during the early part of 1990s, the majority of FDI inflows were in oil and mining sector, by the end of the last century and early this century, light and heavy industry sectors dominate the field. Further, while FDI in agriculture were marginal in the 1990s, now this sector accounting for a significant share in the total FDI both in terms of the number of projects and registered/implemented capital In the service sector, while acquire smaller in relative terms, the hotel and tourism sector still remain significant. An important point is that is that in the early history of FDI, there was no FDI in many important service sectors such the construction of industrial zones, office, apartment, now these sectors start attracting significant portion of FDI inflows. 3. . Regional distribution of FDI pic According to official statistics by the Government Statistical Office (GSO) and the Ministry of Planning and Investment (MPI), all sixty four provinces in Vietnam have received FDI. However, the distributions of FDI crosswise provinces are very much uneven. As shown in Figure 3, the sulphur East area (covering Ho Chi Minh city and its surrounding provinces account for the largest share of FDI. In t he North, Hanoi and neighboring provinces account for the send largest share of FDI, leaving a very small proportion for other regions.This descriptor is due to the fact that Hanoi and Ho Chi Minh city are the both main economic hubs of the country. The concentration of FDI in Hanoi and Ho Chi Minh has been attributed to the increased cost of living and doing business in the two cities. This has led to a tendency that foreign investors are looking elsewhere for the investment location. In addition, the local governments in these provinces have now established the importance of FDI and are actively attracting internal FDI in their respective regions/provinces. 2. 4 Country of origin Table 3 Number of Projects Total registered capital ( Mil USD) TOTAL 13440 199078. 9 Of which Japan 1555 24381. Korea Rep. of 2960 23695. 9 Taiwan 2223 23638. 5 Singapore 1008 22960. 2 British Virgin Islands 503 15456. 0 Hong Kong SAR (China) 658 11311. Malaysia 398 11074. 7 unify States 609 10431. 6 Cayman Islands 53 7501. 8 Thailand 274 5853. 3 Netherlands 160 5817. Brunei 123 4844. 1 Canada 114 4666. 2 China, PR 833 4338. 4 France 343 3020. 5 Samoa 90 2989. United demesne 152 2678. 2 Cyprus 11 2357. 9 Switzerland 87 1994. 6 Luxembourg 22 1498. 8 Australia 261 1316. British West Indies 6 987. 0 Fed. Russian 77 919. 1 F. R Germany 177 900. 2 Denmark 92 621. 5 Finland 7 335. The Philippines 61 302. 3 India 61 233. 8 Mauritius 34 229. 2 Indonesia 30 219. 7 Bermuda 5 211. Italy 40 191. 9 Slovakia 4 147. 9 Cook Islands 3 142. 0 United Arab Emirates 4 128. 4 Chanel Islands 15 114. Bahama 3 108. 6 Belgium 40 106. 7 Norway 28 102. 4 Poland 9 98. 7 pertly Zealand 18 76. Sweden 28 71. 7 Table 3 documents the distribution of FDI by investors in Vietnam. The top ten foreign investors account for around 80 percent of the total investment in terms of the number of projects, the total investment capital and the registered capital. As can be seen in the Table, the private FDI in Vietnam was and still is dominated by regional investors. Investors from the Asian region account for 67 percent.Although, the US is a late comer to Vietnam, the inward investment inflow has increased significantly since 2001 after the conclusion of the symmetric Trade Agreement (Parker et al 2005). For the European investors as a whole, the number of projects account for only about 10 percent, the total investment capital 15 percent and the register capital 20 percent. References http//www. gso. gov. vn/default_en. aspx? tabid=491 www. gso. gov. vn/default_en. aspx? tabid=491 https//www. google. com. vn/