Vietnam has shifted from low-value industry into a high-value one. A report showed that high-technology projects accounted for 40 percent of total registered FDI capital of $14.366 billion in the first eight months of the year.
These included the $1.5 billion project of LG Display in Hai Phong City and the $300 million R&D (research & development) Center of Samsung Electronics Vietnam.
Prof Nguyen Mai, chair of the Vietnam Association of Foreign Invested Enterprises (VAFIE), believes that after free trade agreements take effect, including the one signed with the EUand the TPP (Trans Pacific Partnership), the FDI flow to Vietnam will increase further.
Mai said the government needs to be determined not to attract FDI to the fields where production capacity is higher than demand, or fields which bring high environmental risks.
The steel and cement production capacity, for example, is high. Licensed petrochemistry and oil refinery projects also have high capacity of 40-50 million tons in total. What Vietnam needs is FDI in high-technology fields which use environment friendly technologies.
Vietnam has its big advantages and it needs to be choosier in receiving foreign investment. FDI Intelligence of The Financial Times last August released a report showing that Vietnam tops the list of 14 countries in attracting FDI.
However, many experts recently pointed out problems that hinder the attraction of FDI into the high-tech sector.
Mai, while agreeing that the problems exist, said that Vietnam still does not have a deep understanding about the world’s giant high-technology groups, each of which has its own characteristics, strategies and development path.
“Microsoft is different from Apple. The way Vietnam tries to attract Apple may not work with Microsoft,” Mai said in an interview with Doanh Nhan Sai Gon.
“The FDI from the US and the EU to Vietnam remains modest because Vietnam has been attracting FDI in a general way, which is suitable to small and medium enterprises, not to large corporations,” he said .
The expert went on to stress that high-technology does not mean using less workers. Samsung’s mobile phone factories in Bac Ninh and Thai Nguyen provinces have work done manually, but not by untrained workers.
Samsung’s factory in Bac Ninh needs only 100 hectares of land, but it employs 43,000 workers. In contrast, Formosa Ha Tinh needs 2,400 hectares of land but only uses 12,000 workers.
Photo: CBR Investment AG