Japanese investors prefer Vietnam
Vietnam has been ranked as the second best venue among ten Asian countries that have the most ideal
investment environment despite higher business costs, according to a survey conducted by Japan External
Trade Organization (JETRO).
JETRO managing director Shigeo Naruse told a news briefing in HCM City last week that the survey was
carried out in the last two months of 2001 in Thailand, Malaysia, Indonesia, the Philippines, Vietnam, China,
South Korea, Taiwan and India where many Japanese investors are operating. Last year, 61.8% of the 129
Japanese companies in Vietnam ran at a profit, only behind China. The success is credited to their efforts
to boost sales proportion to 41.9% of output on the local market. The survey predicts that the profit ratio of
Japanese companies here will fall to 52.8% this year as they will increase exports to 61.5% of output to
take advantage of favorable conditions granted by the Vietnam-U.S. trade agreement.
However, despite the ideal investment
environment, the survey also points out that
many Japanese investors complain about
investment costs which are much higher than
in other Asian countries. These include high
shipping costs, personal income tax, and
telecom fees. Yet, more and more Japanese
investors want to do business here because of
the high economic growth, stability and
abundant labor supply. Also, the increasing
number of profitable Japanese companies in
Vietnam will attract more Japanese investors
here.
According to the Ministry of Trade, Japan is
Vietnam's largest export market. Export to
Japan last year reached US$2.5 billion, and is
expected to increase to US$2.7 billion this
year. Major export items include seafood and
handicrafts.
Financial Times Information Limited - Asia Africa Intelligence Wire - March 31, 2002.
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