Japanese firms are incrementally shifting their investments and operations from China to Vietnam due to trade tensions between the United States and China.
Certain Japanese firms have been relocating their plants and manufacturing facilities to Vietnam, said Takahisa Onose, head of the Finance, Taxation and Customs Division under the Japanese Business Association in HCMC.
Speaking on the sidelines of a roundtable conference in HCMC today, December 18, between leaders of HCMC and the Japanese Business Association, Onose said the investment environment in Vietnam in general and in HCMC in particular is favorable.
As such, Japanese companies intend to expand their reach in Vietnam, he said, adding the U.S.-Sino trade war had forced them to relocate.
“The trend to shift Japanese investment from China to other countries, including Vietnam, emerged a few years ago and it has recently gathered momentum,” he said, adding that Vietnam needs to improve its investment climate to welcome the new wave of Japanese investment.
Addressing the conference, Kawaue Junichi, Consul General of Japan in HCMC, said some 1,000 Japanese firms are investing in HCMC. More Japanese firms are seen entering the city.
Some enterprises noted that the Comprehensive and Progressive Agreement for Trans- Pacific Partnership, which is expected to come into force in 2019, will pave the way for stronger cooperation between Vietnam and Japan, which are both members of this high-standard free trade deal.
At the conference, a representative from the HCMC government said the city has always considered Japan its leading partner in various fields. As of November, Japan was the city’s fifth largest investor, having invested in over 1,200 operational projects valued at a total of US$4.2 billion.
The city has accepted an additional 200 newly registered projects and more than US$200 million in increased capital from Japanese investors, compared with 2017. Also, the Japanese Business Association in HCMC currently has 1,000 members, up 70 members against last year.
Vice Chairman of the HCMC government Le Thanh Liem said that the conference was aimed at discussing difficulties and addressing bottlenecks faced by the firms operating in HCMC.
The city also expected the conference to help raise Japanese firms’ confidence in the government to foster and expand their manufacturing operations in HCMC, Liem added.
“The city is currently executing the special mechanism in line with the National Assembly’s Resolution 54 and developing a smart urban model in a bid to create favorable conditions for foreign firms.”
To proactively call for investment from Japan, the HCMC Investment and Trade Promotion Center (ITPC) has recently made two visits to Japan to conduct trade promotion activities and has welcomed 17 business delegations from Japan.
ITPC director Pham Thiet Hoa said that in preparation for the conference, ITPC worked in June with the Japanese Business Association to collect information on difficulties and hindrances faced by Japanese firms, aiming to address these problems.
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