Ho Chi Minh City attracted about US$3.63 billion in foreign direct investment (FDI) capital in the first seven months of this year, marking a year-on-year increase of 15.2 per cent, according to the municipal People’s Committee.

Nearly $688.8 million came from 678 newly registered projects, an increase of 26.9 per cent and 18.3 per cent respectively on the same period last year.

In the period, 2,668 foreign investors bought shares and acquired stakes of domestic enterprises with a total registered capital of $2.6 billion, 28.3 per cent and 16.7 per cent higher respectively than on the same period last year.

Meanwhile, the city granted business licences to 24,529 new domestic enterprises worth more than VND396 trillion ($17 billion), up 0.9 per cent and 25.7 per cent, respectively.

Up to 71,874 existing enterprises were allowed to add a combined total of more than VND160.4 trillion to their investment, up 2.2 per cent in number and 63 per cent in value.

The municipal People’s Committee said trade and investment promotion activities have contributed to accelerating the economic restructuring of the city and promoting exports of high value-added processed products. They have also helped increase investor confidence in the city’s business environment.

To further develop both domestic and FDI enterprises, municipal authorities will continue to simplify administrative procedures and remove investment barriers. Trade promotion activities and conferences will be arranged to promote co-operation between domestic and foreign investors.

According to Emerging Market Views, a news website based in New York, in the absence of clear evidence that the US-China trade dispute will soon end, it sees a new wave of investment from multinational companies shifting production from China to Vietnam to avoid US taxes and seek new suppliers, allowing Vietnam to reach a 7.8 per cent FDI increase in the first five months of this year, with a total value of $7.3 billion.

Kevin Snowball, founder and CEO of PXP Vietnam Asset Management, told Emerging Market Views that as Vietnam has opened its door to integrate into the world economy, expanding export markets through free trade agreements including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTTP) and the European Union-Vietnam Free Trade Agreement (EVFTA), these moves are expected to increase the country’s FDI by 10 per cent from $20 billion invested in this year.

CEO of VAM Vietnam Fund Management JSC Thieu Thi Nhat Le said these FTAs will help Vietnam’s FDI grow when FDI contributes about 70 per cent of its export revenue. Vietnam’s FDI value increased to 38.7 per cent in the January-May period of this year, mostly from Chinese firms and the manufacturing and processing sectors. VIET NAM NEWS