Vietnam is likely to see a new wave of investment from Taiwan as the country offers good prospects for foreign investors.
The visiting Taiwanese companies operate in two major segments, daily commodities and industrial goods and equipment.
John Tang, director of the Taiwan Trade Centre's (TAITRA) office in Ho Chi Minh City, said that the Taiwanese business community was very optimistic about the investment climate in Vietnam. According to Tang, the government is on the right track with many supportive policies to boost the economic growth.
According to the statistics of the Foreign Investment Agency under the Ministry of Planning and Investment, there are 2,429 valid Taiwanese projects in Vietnam with the total investment capital of $28.74 billion. By these figures, Taiwan ranks as the fourth out of 103 countries and territories investing in Vietnam. Currently, Taiwan's investment projects are mainly focused on the manufacturing and agricultural sectors, especially steel, textile and garments.
According to Tang, a bigger wave of Taiwanese investors might flock to Vietnam, as the market will open up more opportunities with the wide range of new free trade agreements (FTAs) coming into force. Many Taiwan-based textile firms intend to reel out new investments in Vietnam ahead of the Trans Pacific Partnership (TPP) to enjoy preferential tariffs. There will be a shift in the investment trend of the sector in the coming time with more companies establishing yarn manufacturing facilities to form a complete supply chain in the country.
In addition, the Taiwanese government sees an enormous potential in Vietnam's retail market with the synchronous development of traditional outlets and supermarkets. The trend of growing Japanese and Korean investments in the services, retail and Fast Moving Consumer Goods (FMGC) sectors is also driving the government to bring Taiwanese retailers to Vietnam.
Referring to the supporting industries, Tang underlined that Samsung has injected billions of US dollars into smartphone production plants in the country and considers Vietnam its new manufacturing base. Therefore, Taiwanese investors expressed increasing interest in setting up factories in Vietnam to produce raw materials and component parts for the electronics giant.
Ho Chi Minh City currently houses about 600 Taiwanese companies that mainly produce for export. In the future, these companies are expected to expand their production capabilities to meet the local demand and export at the same time.
By Thanh Van (VIR)
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