Vietnamese-Japanese Relations: Promoting investment and trade

 

 

Vietnam and Japan share over 400 years of economic cooperation. In recent years, the orientation and policy have been reaffirmed by diplomatic and economic activities, especially the meeting between Prime Minister Nguyen Tan Dung and former Prime Minister Shinzo Abe in late 2006 and the State visit of President Nguyen Minh Triet to Japan in November 2007.

 

It is safe to say that bilateral economic relations have reached a new height. Two-way trade hit US$12.5 billion in 2007 and is expected to reach US$15 billion in 2010. The structure of commodities is mutually complemented and meets the demand of both markets.

 

Japan ranks second in registered investment capital in Vietnam with over US$16 billion. Japanese ODA plays an important part in the development of Vietnam.

 

The completion of legal foundation (the signing of agreement on comprehensive economic partnership) has set the orientation for the economic cooperation between the two countries.

 

While in the past Japanese investors have focused on manufacturing, they have now expanded to other sectors such as heavy industry, mining, finance and distribution. According to JETRO survey in 2007, Japanese business expansion in Vietnam will be the highest in Asia: 92.5 percent in production, 88 percent in non-production and no Japanese company plans to reduce the size or move out.

 

In particular, both sides have realised the importance of developing supporting industries for the development of both Japan and Vietnam, meeting the demand of Japanese investors and Vietnamese businesses. Japan has seen great potentials of Vietnam in such development. It will help promote the comprehensive cooperation and mutual development between two business communities, especially small and medium sized enterprises (SMEs). It also shows the importance of supporting industries to foreign investment and economic development, the concerted efforts of State-owned and other sectors in the development of supporting industries, and the co-relation between local and foreign businesses, especially Japanese companies.

 

Presently, besides the efforts to implement big projects vital to economic development in Vietnam such as railways, roads and high technology, Vietnamese and Japanese businesses have also numerous opportunities in potential areas such as upgrading Vietnamese infrastructure, high technology, manufacturing, electronics, IT and telecommunication, supporting industries, export processing, mining with Japanese technology, energy, especially atomic energy, distribution, financial and banking services.

 

 

VCCI has played an early and active role in promoting cooperation between Vietnamese and Japanese businesses, especially the cooperation with Japanese business associations, economic and trade promotion organizations, contributing significantly to the cooperation between two business communities.

 

The Vietnam-Japan Business Forum (VJBF) – bridge’s both two business communities. Established in August 2006, it was an initiative to develop bilateral relations while Vietnam was preparing for WTO membership and deeper integration with global the economy. It also facilitates the cooperation between various sectors and businesses of the two countries in economic development, trade, investment and tourism. VJBF is sponsored by VCCI and Japanese Business Association in Vietnam and based on action plan initiated annually to create an important channel with Vietnamese government promoting economic cooperation and friendship between Vietnam and Japan.

 

VJBF activities have been highly appreciated by businesses of the two countries and contributed efficiently to the bilateral cooperation. So far, some 800 Vietnamese and 400 Japanese businesses have joined VJBF network. VJBF has issued monthly bulletin and developed website providing information on business opportunities in various fields. In the past two years, VJBF sponsored dozen of seminars promoting trade and investment, providing Japanese businesses information on Vietnamese policy. It has organized several business delegations accompanying Vietnamese State and Party leaders to visit Japan as well as business missions to promote trade and investment with Japanese market. It has also received dozen of Japanese business delegations and helped them establish partnership with Vietnamese businesses. In addition, VJBF has contributed to the capacity-building of Vietnamese businesses, and together with AOTS (Japanese overseas technical assistance organization) and other Japanese partners, organized training courses to increase management skill and competitiveness of Vietnamese and Japanese businesses.

 

In the years to come, VJBF will mobilize more resources to expand its activities, especially providing information, matchmaking, promoting trade and investment with even higher efficiency.

 

 

TheVCCI will continue to play an active role in promoting economic cooperation, trade and investment between Vietnam and Japan:

 

·         Both sides will implement a Vietnam-Japan Joint Initiative and accelerate the negotiation on Economic Partnership Agreement (EPA) to complete business environment and legal framework and deepen economic cooperation between Vietnam and Japan.

·         Vietnam will improve the investment environment and related services to meet the demand of foreign investors including those from Japan.

·         It is important to increase local resources (especially human resources) to meet the high demand of Japanese investors. The failure in cooperation by Vietnamese businesses would slow down the investment process.

·         VCCI will encourage the development of support industries to increase cooperation with Japanese investors and define strategic position of Vietnam in the global chain of supply and value. It will increase cooperation between small Japanese businesses and Vietnamese businesses to promote supporting industries.

·         To improve and expand trade and investment promotion activities with Japanese market, assisting Vietnamese businesses, especially SMEs to develop cooperation with Japanese SMEs.

·         To increase training human resources for Vietnam, especially projects under implementation, learning and applying Japanese experience in efficient use of resources (power, water, and natural resources), environment protection and sustainable development.

·         To improve the capacity of government and business sectors to receive new Japanese investment inflow.

 

Furthermore, as Japan is a strategic partner and key market for Vietnam, with government support VCCI will expand the activities of VJBF to promote cooperation between Vietnamese businesses and Japanese Business Association in Vietnam, Keidanren, Jetro, JCCI. In addition to three main tasks: (1) providing information to businesses, (2) promoting trade and investment, (3) increasing competitiveness, VJBF will help Vietnamese and Japanese businesses to develop support industries to meet the urgent demand of industrialisation and economic integration, No doubt, it is also the main task of VCCI in the coming years to expand economic cooperation with Japan and Japanese businesses in particular.