More FDI Poured into Restaurants, Accommodation

According to the Foreign Investment Agency under the Ministry of Planning and Investment, Vietnam licensed only 504 foreign direct investment (FDI) projects totaling over US$5 billion in the first eight months of this year, accounting for 10.8 per cent of the same period last year. However, the FDI disbursement has been very optimistic and foreign firms tend to focus on services and food business.
Head of the Foreign Investment Agency Phan Huu Thang said, the country attracted a total FDI capital of US$10.453 billon in the first eight months of this year and disbursed US$6.5 billion. Despite the fall in the newly-licensed capital, the added capital of existing projects sharply increased against the corresponding time of 2008. In the period, the country allowed 149 FDI projects to raise capital by US$4.828 billion, up 3.8 per cent on-year. "This shows investors’ confidence on Vietnamese economy’s recovery prospect”, Thang said.
The official added that foreign investors disbursed US$6.5 billion in FDI between January and August, making up 91.5 per cent of the same period of 2008. Thang noted that the nation aims to disburse US$9 billion this year and the figure can be within reach as investors and enterprises are actively boosting the disbursement.
According to the agency, hotel and food services are the most attractive for foreign investors. Up to Us$4.566 billion FDI was poured into the sectors in the eight-month period, including US$755 million from 20 newly-licensed projects. The rest came from just capital rise of US$3.811 billion from just three existing projects. The manufacturing industry surpassed the realty sector to stand in the second position in attracting FDI. The typical projects in the sector are China Steel Corp’s steel project and Japanese Sumitomo Metal’s project.
Between January and August this year, 35 countries and territories registered to invest in Vietnam. The U.S. became the largest investors with US$3.956 billion, followed by Taiwan US$1.353 billion and British Virgin Islands with US$1.247 billion. Ba Ria-Vung Tau was the most attractive destination for foreign investors in the period with US$6.485 billion. The runners-up were HCM City, Binh Duong, Hanoi and Dong Nai with US$1.04 billion, US$755 million, US$367 million and US$281 million.
The agency said the FDI sector saw trade surplus of US$3.49 billion in the eight-month period, meanwhile the whole country reported trade deficit of US$5.1 billion in the same time.
The sector obtained export turnover of US$18.67 billion between January and August this year, including crude oil, down 21.8 per cent from a year ago and representing 50.1 per cent of the country’s total trade turnover. If excluding crude oil, the sector gained the turnover of US$14.47 billion, holding 38.8 per cent of the country’s total export turnover and down 7.3 per cent on-year. Meanwhile, the FDI sector spent some US$15.18 billion to import goods so far this year, down 19.9 per cent o-year, equivalent to 35.8 per cent of the nation’s total import turnover.
Export value of the FDI sector, including crude oil, was US$18.6 billion in the first eight months, down 27.8 per cent on-year. If excluding crude oil, the sector saw an on-year drop of below 8 per cent on-year. Meanwhile, the FDI sector’s import value was still 4.7 per cent higher than export value, excluding crude oil.