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Taiwan lags behind Japan, South Korea in Vietnam investment: envoy

Taiwan lags behind Japan, South Korea in Vietnam investment: envoy

Taipei, Jan. 20 (CNA) Once the largest source of foreign investment in Vietnam, Taiwan has lost its leading position to Japan and South Korea amid concerns over rising wages, according to Vietnam's representative in Taiwan. Bui Trong Van, head of the Vietnamese Economic and Cultural Office in Taipei, said he hopes Taiwan will regain the top title this year through broader partnerships in the high-tech and agricultural sectors. "We hope Taiwanese businessmen can reassume the leading position they held for a long time, after the rapid growth of Japanese and South Korean investment in Vietnam," he told CNA in a recent interview. Taiwan's annual investment in Vietnam was surpassed by Japan and South Korea in 2012 due to Taiwanese investors' concerns over Vietnam's rising wages, inflation, volatile exchange rates and dwindling incentives, Bui said. According to Vietnam's Ministry of Planning and Investment, some 43 countries and regions launched investment in the country in the first six months of 2012. Japanese companies led the way with US$4.15 billion in investment during the period, accounting for 65.1 percent of total foreign investment, the ministry's statistics showed. Companies registered in the British Virgin Islands ranked second with newly registered capital of US$484 million, representing 7.6 percent of total investment.
South Korean enterprises were third with new investment of US$480.8 million, accounting for 7.5 percent of the total. Based on data compiled by Taiwan's Ministry of Economic Affairs, however, Taiwanese companies invested only US$80 million in Vietnam in the first half of last year, down 60.6 percent from the same period of 2011. Bui said that wages have become the biggest obstacle for Taiwanese businessmen when considering further investment in Vietnam, where soaring inflation has lowered local workers' real income and sparked demands for higher nominal wages. "As in other countries, this is a trend. Wages cannot be too low," he said. Since Vietnam joined the World Trade Organization in 2007, its government has also reduced investment incentives for certain countries and has become more selective in accepting foreign investment proposals to encourage green industries, Bui said. He contended, however, that Vietnam is still a worthwhile investment destination for Taiwanese high-tech companies because of its geographical proximity to China's market and rich human resources. There are also opportunities for Taiwan's advanced agricultural technology to help increase Vietnam's yields of such crops as rice, coffee, beans and rubber, Bui said. "Vietnam has several existing advantages because it is similar to Taiwan in terms of culture and customs," he said. "Many Taiwanese businessmen feel comfortable and safe there." Although Vietnam's economy grew about 5 percent in 2012, lower than its long-term average of 7 percent, the figure is still favorable when compared with most of its neighboring countries in Southeast Asia, Bui said. He suggested that Taiwanese companies consider investing more in Vietnam in the near future because the Vietnamese administration is prepared to lower inflation and boost the country's economy this year. Asked about the possibility of a free trade agreement (FTA) between Taiwan and Vietnam, Bui said the two sides will begin by assigning scholars and professionals to study each other's economic situation. "If we can improve our understanding of each other, sooner or later we will consider bilateral issues," Bui said, without giving any timetable. (By Jeffrey Wu)


Updated : 2020-11-30 19:48 GMT+08:00