Chen Yo, Kuei, Chairman of the Council of Taiwanese Chamber of Commerce in Vietnam said Taiwanese investors are eyeing Vietnam as an attractive destination, just behind China among Asian countries.
Currently, around 2,000 Taiwanese businesses are operating in Vietnam. In 2008 alone, Taiwanese investment in Vietnam mostly focused on the fields of industrial and construction sector with 1,460 projects valued at US$16.2 billion, accounting for 75.3 per cent of Vietnam’s number of FDI projects and 80.5 per cent of the country’s total registered FDI capital. Taiwanese projects mainly concentrate on the southern provinces of Dong Nai, HCM City, Binh Duong and Ba Ria-Vung Tau. Among projects, 1,705 are wholly foreign-invested projects captialised at US$16.6 billion (making up 88.6 per cent in Taiwan’s project number and 84.6 per cent of its pledged capital in Vietnam) and 193 are joint venture projects. Most of Taiwanese projects in Vietnam use high-tech and advanced production lines, particularly projects to produce motorbikes for export, cement and electronic components.
The majority of Taiwanese projects is small and medium-sized scale, however, Vietnam is home to some big projects invested by Taiwanese companies such as Hung Nghiep Formosa Steel Ltd. Co and Son Duong Port at Vung Ang industrial zone in central Ha Tinh province’s Ky Anh district totaling roughly US$7.9 billion. Honhai Group invested US$5 billion to build a 300-hectare industrial zone in northern Bac Ninh province and another park of the same area in the neighboring country of Bac Giang. The firm will build factories to produce automatic cameras and high-tech communications products at the parks. The group chairman said the company aims to make Vietnam become its third biggest investment destination in Asian after China and India. Honhai is among Taiwan’s three biggest companies which specialise in producing mobiles, computers, laptops, games and IT products.
Other large-scale projects invested by Taiwan in Vietnam include Vietnam-JinWen Ltd. Co. in Ho Chi Minh City worth US$524.5 million, Haulon Group’s fiber and textile project capitalised at US$477 million and ChinFon cement project in Haiphong valued at US$450 million. The projects are operated well despite facing difficulties caused by the global economic slow down.
Meanwhile, Vietnamese investment in Taiwan remains very modest with just two projects costing US$468,000, making Taiwan the 36th among 41 countries and territories receiving the country’s investment. Economists said Vietnam and Taiwan need to boost their economic cooperation to match their great potential.
New investment wave from Taiwan expected to come to Vietnam
Chen Yo, Kuei also said that Vietnamese economy will be stabilised from now to the year-end and the nation is forecast to receive a strong investment flow from Taiwan. Many Taiwan’s business delegations operating in electronic and auto components have come to Vietnam to explore investment opportunities. The upcoming event of the 16th Annual Vietnam-Taiwan Congree jointly held by the Vietnam Chamber of Commerce and Industry (VCCI) and the Chinese International Economic Cooperation Association (CIECA) The Taipei Computer Association (TCA), which is expected to welcome over 40 companies from Taiwan operating in Vietnam, is hoped to boost the economic ties between the two countries.
One of Vietnam’s competitive advantages highly appreciated by Taiwanese investors is labour costs which are 10 times lower than those of Taiwan. Meanwhile, several big Taiwanese projects in Vietnam need a great number of workers. Therefore, the country of 87 million people is very attractive to Taiwanese investors. The trade official also affirmed that Vietnam boasts political stability and share the same culture identifies in some ways with Taiwan.
But, the biggest barrier for Taiwanese investors in Vietnam is facing strikes of local workers. Chen- Yo, Kuei, who is also director of a successful company active in Vietnam, pointed out measures to deal with the disparity between VND and USD and Vietnam’s high inflation rate, which will help make Taiwanese investors feel more secure to do business in Vietnam.
(Source:Vietnam business Forum,Vol.7 No.30,July 25-31,2009)