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Japanese Companies Shift Investment To Vietnam As Thailand And China Become Less Attractive

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Japanese Companies Shift Investment To Vietnam As Thailand And China Become Less Attractive
Date: May 10, 2014
Source: International Business Times – By Sophie Song

Japanese investors are heading to Vietnam as of late, as Thailand is rocked by political instability and China becomes less attractive with rising wages. Increasing foreign capital could help Vietnam welcome a new era of productivity.

In 2013, Japanese capital flow to China dropped to $6.50 billion, less than half the $13.48 billion Japanese investment China attracted in 2012. Similarly in Thailand, in 2011 Japanese investment amounted to $7 billion, while in 2013 that number dropped to $2.5 billion, according to the Business Times, a Vietnamese newspaper.

Vietnam, on the other hand, experienced the opposite trend. Foreign investment increased from just $169 million in 2010 to $4.45 billion in 2013, including a number of high-profile projects backed by Japanese companies like the $2.8 billion Nghi Son petrochemical oil refinery, the $650 million Bridgestone’s project, and the $175 million Panasonic Industrial Devices project.

Vietnam’s chief attractions include a peaceful environment and low cost labor force, said Atsusuke Kawada, chief executive of the Japan External Trade Organization (JETRO).

“In Vietnam, Japanese can find the things they cannot find in other countries,” Kawada said, according to the Business Times.

“Vietnamese are very diligent and hardworking, which can be reflected in the lower numbers of workers’ days-off than in other countries,” Kawada added. “Besides, it is easy to recruit workers in Vietnam, while employers do not have to pay too high to employ workers.”

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