TOKYO: Japan is the second largest foreign investor in Vietnam with 2,494 projects with total registered capital of nearly $36.9 billion. However, since 2011, because of difficulties faced by the Japanese economy and the global recession, Japan’s investment in Vietnam has declined.
Data by JETRO showed that, in 2014, 436 Japanese-invested projects were licensed in Vietnam, the lowest in three years. The total registered capital was more than $2 billion, less than half of the two previous years.
In particular, the manufacturing sector, which accounts for the largest proportion in Japan’s investment in Vietnam, fell, with a reduction of up to 53 projects and nearly 30% in capital, from nearly $1.2 billion in 2013 to nearly $830 million 2014.
Experts say that projects in the manufacturing sector require large capital, long-term investment and depend on market demand.
Atsusuke Kawada, chief representative of the JETRO Hanoi Office, agreed, saying that big projects, particularly in the manufacturing sector, will not be established in the coming time due to business conditions.
Even in indirect investment, according to a report published in February by Stoxplus, Japan still ranks sixth on the list of countries conducting mergers & acquisitions (M & A) in Vietnam.
The field of production of goods and services accounted for only 10% of the total value.
“The big deals of Japan will not appear this year. After a number of major deals last year, the Japanese investors now are shifting to long-term investment with small or medium capital, but with huge potential,” the report said.
