Việt Nam has potential to engage deeply in global supply chain: experts

International experts discuss at the “Fitch on Việt Nam 2024” Conference on August 20 in HCM City. — VNS Photo Văn Châu

HCM CITY — With preferential policies and inherent potential, Việt Nam is becoming an attractive destination for foreign direct investment (FDI).

This is an assessment of Fitch Ratings, a credit rating organisation, at the conference “Fitch on Việt Nam 2024” on Tuesday in HCM City.

According to data from the Foreign Investment Agency under the Ministry of Planning and Investment, as of July 20, total foreign investment capital registered in Việt Nam reached more than US$18 billion, an increase of 10.9 per cent compared to the same period in 2023.

Meanwhile, disbursed capital reached more than $12.6 billion, an increase of 8.4 per cent over the same period last year.

Thus, both registered investment capital and allocated capital in first seven months continued to increase over the same period last year.

Notably, newly registered FDI capital topped nearly $10.8 billion, an increase of 35.6 per cent, and adjusted registered FDI capital reached nearly $5 billion, a rise of 19.4 per cent.

Sagarika Chandra, director of Asia-Pacific sovereign ratings at Fitch Ratings, asserted at the conference that Việt Nam has participated in many free trade agreements (FTA) and has become a country that has signed FTAs ​​with all major global economic partners, including the US, Russia, Japan, China and the EU.

Forecasting that FDI into Việt Nam will continue to maintain positive growth momentum in the last months of 2024 and reach a level similar to or higher than the previous year, Michele Wee, general director of Standard Chartered Bank Việt Nam, said Việt Nam has many favourable conditions to attract FDI including liberalisation with many trade agreements and advantages in transportation costs thanks to good sea and air connections.

Việt Nam is also making efforts to digitally transform.

International experts believe that the growth of FDI inflows comes from foreign investor confidence in stable macro-economic policies.

Việt Nam’s investment environment is becoming more open and safer.

In addition, many fiscal and monetary policies that support businesses are effectively implemented.

The State also supports the business community to stabilise and develop production and business.

Recently, Fitch Ratings upgraded Việt Nam’s national credit rating to ‘BB+’, from ‘BB’, with a “Stable” outlook.

At the same time, it emphasised that Việt Nam has an advantage in attracting FDI thanks to positive economic prospects.

Chandra said that Việt Nam is welcoming a strong investment wave in the field of technology and electronics and has a lot of potential to develop the semiconductor industry.

This opens up opportunities for Việt Nam to attract high-tech FDI.

Therefore, to attract and retain foreign investors, Việt Nam needs to have a competitive business environment that is superior to other countries.

Efforts to improve the business environment need to be implemented more decisively and effectively.

Along with that, Việt Nam needs to simplify administrative procedures and business conditions to help reduce procedural burdens and reduce risks.

These factors will help increase Việt Nam’s attractiveness to foreign investors.

“In a context where many countries are competing very strongly to participate in global supply chains and attract investment from large corporations, Việt Nam also needs to improve human resource training, especially high-quality human resources in the fields of high technology and green economy,” Chandra said.  VNS