Japan External Trade Relations Organisation (Jetro) recently publicised the annual survey result on Japanese firms operating in foreign countries and territories including Indonesia, Malaysia, Philippines, Singapore, Thailand, Vietnam, China, Hong Kong, India, Korea and Taiwan.
The survey received the feedback of 1,745 companies mainly specialising in fields of automobile spare parts, chemicals, electrical and electronic equipments and machines, metallic, commerce, transport, construction, securities, investment and technological services.
Accordingly, up to 92.6% of Japan’s surveyed firms operating in Vietnam plan investment expansion and product diversification here over next 1-2 years. None of surveyed ones plans to narrow production and investment scope or shift to another country.
Hiroyuk Moribe, Jetro chief representative in Vietnam predicted, Vietnam will be the new investment destination of Japan. Japanese producers in Vietnam believed in the business prospect of 2008 based on expectation that export turnover will increase sharply. Meanwhile, Japan’s non-production companies in Vietnam also expected high revenue thanks to the market expansion in the country within this year.
However, the Jetro survey also showed that business disadvantages of Japanese firms in Vietnam are increase in corporate costs, industrial land price, prices of renting offices and housing. According to Jetro, Hanoi is the fifth most-expensive city in fields of office leasing prices while HCM City has a special expensive price of houses for foreigners to rent. In addition, transport cost of Da Nang is still too high.
The stratification ratio of Japanese firms in Vietnamese investment environment declined from 75.4% in 2006 down to 41.7% in 2007, ranking the fifth among six Asean countries and marked the highest reduction among regionally surveyed nations, Jetro reported.