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The Vietnam News

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France ranks first among EU investors in Viet Nam

HANOI - France currently ranks first among the European Union investors in Viet Nam with an investment of more than 2.12 billion USD, statistics released by the Ministry of Planning and Investment (MPI) showed. Given the blossoming of diplomatic ties between France and Viet Nam, bilateral economic relations have developed steadily, Phan Huu Thang, director of the Foreign Investment Agency under the MPI, said.

“Generally, French projects are implemented smoothly in Viet Nam. Several French-invested enterprises are operating lucratively and are considered successes in many areas of industry,” he said, citing names he considered “typical examples”, like Sanofi Synthelabo, Aventis Vietnam, Victoria, Bourbon, SCAVI and Design International.

MPI statistics show that France has invested in Viet Nam since 1988, when the Foreign Investment Law was passed. In the first two years, almost all the French projects were small. However, the picture changed radically in the following years as French investment rose to 993.7 million USD by 1997, marked by the licensing of such large projects as France Telecom’s 615-million-USD business cooperation contract (BCC) with the Viet Nam Posts and Telecommunications Corporation, the 35-million-USD An Lac hypermarket, the 32.9-million-USD pharmaceutical project, Bayer Vietnam, and the 25.5-million-USD cane sugar project, Bourbon Gia Lai. French investment in Viet Nam fell in 1998 and 1999 due to the “impact of the Asian financial crisis”, Thang said, before witnessing a recovery in 2000. Yet the recovery remains “tenuous”, with virtually all the licences issued worth less than 5 million USD, except the 480 million USD Phu My 2.2 Power Project, approved in 2001, which accounted for 97 percent of the total French investment that year. According to the MPI, in the first half of this year, only five French projects, worth a total of 3.04 million USD, were licensed.

More than 1 billion USD of the French investment in Viet Nam has been in the telecom and healthcare sectors, where high technologies are transferred to the Vietnamese. With just around 200 million USD in registered capital, agriculture continues to be a less attractive destination for French investment although it has seen the highest ratio of actual disbursement, at 73 percent compared with 56 percent in construction and industry and 38 percent in services. “It should be noted that the ratio of actualised capital to registered investment remains lower for French projects than the average for all foreign investments in Viet Nam,” Thang said. This ratio was only 49 percent by the end of last year against the overall average of 59 percent. “The main reason is that some of France’s large-scale projects are still in the early stages of implementation,” Thang explained.

The MPI minister, Vo Hong Phuc, said with Viet Nam’s increasingly open policies for attracting investment from the EU in general and from France in particular, investment from the latter was expected to expand in the future. “Viet Nam’s policies will be more open for French and EU enterprises, which will in turn bring about new opportunities for both Vietnamese and French companies in business and investment,” he said.

Vietnam News Agency - July 13, 2004.