On July 28 twenty years ago, Vietnam officially joined Association of Southeast Asian Nations (ASEAN). It is expected that by the beginning of 2016, ASEAN will be one step forward in establishing ASEAN common market, which is great opportunity and challenge to enterprises on the process of conquering the markets and integrating for development.
Singapore leads ASEAN investments into Vietnam
Statistical data of Foreign Investment Agency (FIA) of Ministry of Planning and Investment showed that by June 20, 2015, 2,632 FDI projects of ASEAN have been effectuated in Vietnam with total registered capital of USD 54.6 billion. Averagely, each project bears USD 20.7 million which is higher than the capital amount that one foreign investment project into Vietnam (averagely USD 13.9 million) could bear. FDI resources from ASEAN into Vietnam are mainly in processing and creating industries at totally USD 22.2 billion. Real estates is secondly established with 97 projects of totally USD 16.6 billion of registered capital. In the third place is construction with 175 projects of totally USD 3.24 billion.
Currently, 55 out of 63 provinces and cities nationwide have FDI resources from ASEAN. Ho Chi Minh City is on top of the list before Hanoi, Ba Ria Vung Tau, Dong Nai, and Binh Duong Provinces. FDI projects from ASEAN to Vietnam are mainly foreign direct capital (1,962 projects of USD 35 billion, accounting for 64.3% of total registered investment capital). Following up is 609 joint venture projects of USD 18 billion, accounting for 33% of total registered investment capital. And, thirdly is joint stock capital of 34 projects of USD 941.3 million. The remaining is from joint business contracts.
Singapore leads the ASEAN nations in direct investments into Vietnam with 1,428 projects at totally USD 32.2 billion in which, Vietnam-Singapore Industrial Park Joint Venture is a model of friendly cooperation by the two nations. In Binh Duong Province, two major projects of Mapletree and Ascendas Protrate have been developed by Singapore.
Malaysia stays second in the list of ASEAN nations of highest investments into Vietnam with 499 projects of totally USD 12.06 billion before Thailand with 392 projects of totally USD 6.8 billion.
To a common market
According to FIA, ASEAN enterprises have made investments to all 18 industries of national economic system of Vietnam which is one of the three nations of highest achievements of General Planning for Construction of ASEAN Economic Community (84.5%) with robust negotiations on measures to facilitate trade, investments, and services among efforts for commitment fulfillment on tax barrier removal against the products in industries prioritized for integration, cooperation expansion and economic connection of ASEAN and partnership nations.
In 2015, Vietma focuses on targeting for ASEAN Economic Community establishment on December 31, 2015. Besides, Vietnam and the nations will contribute to the development vision of ASEAN after 2015 to facilitate deeper interconnection within ASEAN.
Mr. Do Nhat Hoang, FIA Director, said that the establishment of ASEAN common market will faciliate investment luring in general whereas investors from ASEAN will contribute greatly in introduction and consumption of products in the common market.
Proactivity required
“Proactive integration” and “proactively integrating” are present at conferences and workshop on trade promotion and market introduction for years. After 20 years of integration into ASEAN, Vietnamese enterprises have created various famous brandnames. In Binh Duong Province, they have made great efforts to exceed propulsory standards to affirm their brands including beverages of Tan Hiep Phat Group, Hoa Sen Steel, Truong Thanh Furniture, etc.
Mr. Nguyen Thanh Trung, the President and General Director of Dong A Steel Joint Stock Company shared his company’s integration into the markets by their observation of industrialization and modernization approaches. Initially, making use of South Korean production line, Dong A Steel products have been exported to Indochina and tow ASEAN markets of Indonesia, Malaysia, and Thailand.
Then on, the company switched to European technology with modern management software to facilitate their access to markets of strict requirements in Europe, USA, and Japan.
Enterprises are facing various challenges against the integration and progression to ASEAN common market. Those are visible in acquisition and merging affairs of major brandnames of Metro Vietnam, Nguyen Kim, and Kinh Do. Some professional leaders of the province have raised up the question on whom and what purposes of such affairs before giving an example of a feeder enterprise gaining success by acquiring market shares of Chinese investor. Then on, the enterprise has dominated the pricing to worry domestic husbandry farmers.
In the future as ASEAN is open as a common market, the mentioned new owners will be decisive of suppliers. Then, domestic suppliers will be on the verge of losing customers or having to accept outsourcing.
Reported by Duy Chi – Translated by Vi Bao
