Takio Yamada, Japanese Ambassador to Vietnam
For the past years, Japan and Vietnam have dramatically strengthened economic, political and social ties based on our Extensive Strategic Partnership for Peace and Prosperity in Asia.
One of the most important recent events for the two countries was Prime Minister Yoshihide Suga’s visit to Vietnam last October. He chose Vietnam as the destination for his first overseas trip as prime minister after taking office. This demonstrated the degree of importance Japan attaches to Vietnam and the enhanced mutual trust and confidence between the countries.
For Japanese manufacturing firms, Vietnam is now the most popular destination for foreign direct investment among members of the Association of Southeast Asian Nations, according to a survey conducted by the Japan Bank for International Cooperation. Despite the COVID-19 pandemic, the popularity of Vietnam remains unchanged due to its quality labor, improved infrastructure and political stability. Hoping Vietnam can effectively control the spread of the novel coronavirus, Japan has provided approximately 3 million doses of vaccine. Japan is committed to continuing support for Vietnam to fight the pandemic. It is also noteworthy that the number of Vietnamese youngsters who visit and stay in Japan as technical trainees, students and employees has climbed dramatically over the past decade. Those youngsters have already become an essential part of the Japanese economy and society and are hoped to act as bridges to bring our people even closer together.
In 2023, Japan and Vietnam will celebrate the 50th anniversary of the establishment of diplomatic relations.
In 2023, Japan and Vietnam will celebrate the 50th anniversary of the establishment of diplomatic relations. It is expected that a lot of events and opportunities will be organized to look back on the past 50 years as well as to look forward to the next 50 so we can further enhance our friendly ties as our two peoples look to the future.
Supporting insights on Japanese investments in Vietnam
Masataka Fujita, Secretary-General, ASEAN-Japan Centre
Vietnam has a strong economy and even through the pandemic, the country has been keen to strengthen its cooperation with Japan. As one of the CLMV (Cambodia / Lao PDR / Myanmar / Vietnam) countries and an ASEAN member country, we enjoy working closely with Vietnam.
The four key areas for increased cooperation between ASEAN and Japan are: marine plastic waste, connectivity, sustainability and economic development and ASEAN member countries want assistance from Japan, specifically in terms of marine plastic waste. We gathered 22 young leaders from all ASEAN members and Japan to make a joint declaration on the issue of marine plastic waste and are continuing this initiative through education to raise awareness.
Strengthening and rebuilding value chains has been a priority for businesses across Japan and the ASEAN region. Our ‘Resilient Global Value Chains (GVCs) for ASEAN and its Relationship with Partner Countries’ report identifies which industries are more vulnerable to both upstream and downstream risks associated with global value chains. The report indicates that Vietnam can expand its supplier market and that it should find more buyers rather than relying on existing markets.
Vietnam’s GDP grew 2.9 percent in 2020 and is one of the only countries which registered positive economic growth last year. This year the country’s economic growth is projected to reach 7 percent, the same as 2019.
Vietnam’s high economic growth rate is largely export-driven. The country is regarded as ‘a production location of choice’ for many transnational companies implementing the ‘China Plus One’ strategy and exports are ‘filling the gap’ caused by the ongoing China-United States trade conflict.
Many companies investing in Vietnam today are helping to improve the country’s supply chain capabilities: in 2020, Vietnam’s FDI stock stood at $177 Billion.
Vietnam has concluded the most free-trade agreements in the ASEAN region and also recently concluded the EU-Vietnam Free Trade Agreement allowing manufacturers to export from Vietnam with reduced or even zero tariffs.
While Vietnam’s GDP is growing, the country’s GDP per capita is one of the lowest in the ASEAN region and productivity levels across the country need to be improved. Vietnam is projected to become an ‘aged society’ by 2035 and there are many lessons the country can learn from Japan’s well-established elderly care system.
Takeo Nakajima, Chief Representative, JETRO Hanoi
Vietnam is the only country in the ASEAN Region in which JETRO has two offices. JETRO Hanoi was established in 1993 and our office in Ho Chi Minh was established in 2000.
In terms of its role in global trade, Vietnam became a major player after its ascension to the World Trade Organization in 2006. Since then, many foreign companies, including Japanese firms, have poured investment in the country and helped Vietnam’s economic development.
Vietnam is a key manufacturing base with a growing domestic market. After China and Thailand, Vietnam is the region’s most important manufacturing base for Japanese companies.
In the early 2000s JETRO assisted Japanese manufacturing companies in starting operations in Vietnam. In the last five years we have seen the domestic market grow and more Japanese non-manufacturing companies are entering Vietnam.
Before the pandemic, Vietnam was a very popular market for Japanese investors and the country has managed the challenges of the pandemic relatively well.
Our data from last year shows that 47 percent of Japanese companies in Vietnam intended to expand their business while only 6 percent said they would shrink or close operations.
We are pouring more resources into digital transformation initiatives in Vietnam and Asia and we are running a series of webinars and seminars to connect Vietnamese startups with Japanese companies. Vietnam’s human resources are a good match with Japanese technology especially in mobility, e-commerce, factory automation and business process outsourcing.
Japan has helped Vietnam grow and the equal partnership between our two nations continues to prosper.