Japanese investors are viewing Vietnam as a more attractive investment destination, with higher growth potential for industrial development, particularly in the textile and components industries, the Ho Chi Minh office of the Japan External Trade Organisation (Jetro) said.
Managing director Yoshida Sakae yesterday said compared to Thailand, Vietnam is like a child while Thailand is an adult with decades of industrial development.
At present, there are roughly 1,000 Japanese companies in Vietnam and around 7,000-8,000 firms in Thailand, said Sakae.
He said the Vietnamese government had a clear direction to develop the country's industry. Some companies are constructing steel-blast furnaces and refineries in Vietnam as they are basic manufacturing. The government has set the target to make Vietnam an industrial country by 2020.
The advantages of investing in Vietnam are low labour cost and a larger market than Thailand as the country has a population of 68 million people. Hence, consumption in Vietnam is growing every year.
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The government is expected to draw on S$53.7 billion (US$40 billion) from its reserves for this year and an additional S24 billion (US$17.8 billion) over the next three years to assist local companies transition into a post-pandemic business environment.
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