Present an overview of vietnams FDI attraction in the period 2010 2020 and propose solutions to increase FDI attraction in the coming time

VIET NAM GENERAL CONFEDERATION OF LABOR TON DUC THANG UNIVERSITY FACULTY OF BUSINESS ADMINISTRATION MOCECONOMIC GROUP REPORT TOPIC 2: Present an overview of Vietnam's FDI attraction in the period 2010-2020 and propose solutions to increase FDI attraction in the coming time Instructor: MSc Tran Manh Kien Macroeconomics Class (Shift 3, Thursday) Group : List of students performing: B20H0480 - Võ Trà Giang B20H0507 - Lê Thị Nguyệt Hương B20H0531 - Trần Thị Thùy Linh 720H1477 - Phan Yến Nhi B20H0603 - Phạm Thị Thu Thoa 0 HCMC, December, 2021 0 BẢNG ĐÁNH GIÁ MỨC ĐỘ HỒN THÀNH CƠNG VIỆC CỦA CÁC THÀNH VIÊN STT Họ tên MSSV Nhiệm vụ Mức hoàn thành -Soạn nội dung Chương (Thu hút vốn FDI vào việt nam giai đoạn Võ Trà Giang B20H0480 hậu đại dịch covid-19) 100% -Soạn nội dung Chương (Đề xuất giải pháp) - Soạn nội dung Chương Lê Thị Nguyệt Hương - Soạn nội dung Chương (Phương B20H0507 hướng, mục tiêu, phát triển kinh tế- 100% xa hội gia đoạn 10-20, tầm nhìn 30) -Soạn nội dung Chương (Tình hình Trần Thị Thùy Linh việt nam giai đoạn 2010-2020) -Soạn nội dung chương B20H0531 100% ( Định hướng tăng cường thu hút FDI nhà nước) - Viết lời cảm ơn, lời mở đầu, kết luận Phan Yến Nhi 720H1477 - Soạn nội dung Chương 100% - Làm word -Soạn nội dung Chương (Tổng quan Phạm Thoa Thị Thu diễn biến thu hút FDI việt nam B20H0603 2010-2020) TON DUC THANG UNIVERSITY 0 độ 100% FACULTY OF BUSINESS ADMINISTRATION ************* SCORING SHEET FOR ESSENTIAL MOCECONOMIC SECTOR SCHOOL YEAR 2021–2022 Essay title: Present an overview of Vietnam's FDI attraction in the period 2010-2020 and propose solutions to increase FDI attraction in the coming time Implementation group: Group (Shift 3, Thursday) Evaluate: Ord er Point Poi No ladder nt te Criteria Form of presentation: - Proper presentation of guidelines (fonts, page numbers, table of contents, tables, ) - No typos, typographical errors, citation errors - Various figures, illustrative graphs - Beautiful presentation, clear style, not 0,5 0,5 1,0 1,0 obscure Content: Introduction: summarize the content and structure of the essay 1,0 Part 1: Overview of the topic (theoretical basis) 2,5 Part 2: In-depth topic analysis 2,5 0 Part 3: Conclusion and topic solution 1,0 Total score 10 Letter score: (round to decimal) December 10, 2021 Instructor grading THANK YOU First of all, group would like to thank Mr Tran Manh Kien, lecturer in charge of Macroeconomics, who wholeheartedly taught us through each lesson, answered questions about knowledge as well as the report warmly love, specifically The knowledge acquired during the study is not only the foundation for the reporting process but also helps us to understand, have a more correct and profound understanding of economics Because knowledge is still limited, in the process of doing the test, mistakes will inevitably be made Please give suggestions for the report so that we can improve it and learn from it for the next time Finally, I wish you always have good health to continue to carry out your noble mission of imparting knowledge to the next generation 0 LIST OF ABBREVIATIONS FTA is an acronym for the phrase Free Trade Area, also known as Free Trade Agreement This is a form of international association between countries in which tariff and non-tariff barriers are both reduced or eliminated Since then, gradually formed a unified trading market for goods and services 0 LIST OF IMAGES Figure 2.1: Number of projects, total registered capital, and total realized capital of FDI inflows into Vietnam in the period 2010-2020 .4 Figure 2.2: Total registered FDI capital in Vietnam .8 Figure 2.3: Structure of major FDI partners in Vietnam accumulated until 2020 10 Figure 2.4: FDI attraction in the first months of 2021 (Unit: Billion USD) 12 Figure 2.5: FDI in the first months of 2021 15 TABLE LIS Table 2.1: Amount of capital and FDI projects in Vietnam in the period 2010-2020 0 LIST OF TABLES CHAPTER 1: THEORETICAL BASIS .1 What is FDI? The main features of FDI Forms of FDI Methods of entry of FDI The role of FDI a) Positive effects of FDI b) Negative effects of FDI .3 CHAPTER 2: DEVELOPMENTS OF VIETNAM'S FDI ATTRACTION IN THE PERIOD 2010-2020 The situation of Vietnam in the period 2010-2020 .4 An Overview of FDI Attractions in Vietnam in the period 2010-2020 .7 a) In the field of investment b) Regarding investment partners .10 c) Conclusion .11 Attracting FDI into Vietnam after the COVID-19 epidemic 11 a) FDI inflows since the COVID-19 outbreak 11 b) What should Vietnam to attract sustainable growth of FDI in the postCOVID-19 period? 13 c) After COVID, Opportunities, and Challenges, in FDI Attraction in Vietnam: 15 Consequences .16 CHAPTER 3: STRATEGIES FOR INCREASING FDI ATTRACTION IN THE FUTURE 18 Orientation to enhance the State's FDI attraction 18 Direction, goals and vision for economic development in the coming time 20 Proposed solution .21 0 0 PREAMBLE Currently, foreign direct investment (FDI) is an important part of the investment capital structure of a country, playing an important role for all countries in the world For developing countries, FDI inflows are especially important for growth and international economic integration, because this is an external force supplementing capital, technology, management capacity, business ability, ability to organize and participate in global supply chains As for Vietnam, we are currently changing according to the general trend of the world, developing more and more, on the path of industrialization and modernization of the country However, the starting point is a bit low compared to other countries in the world, economic resources are weak and small; this is one of the great obstacles to the development process Therefore, the mobilization and use of foreign direct investment (FDI) is an extremely important step Looking back on the 30-year journey of attracting FDI, it is undeniable that the contribution of this economic sector to Vietnam's increasing GDP, our country has made remarkable achievements in attracting FDI into development socio-economic development Although impressive FDI investment results, Vietnam is still not the most attractive country for foreign investors in the ASEAN region In addition, the impact of Covid-19 the epidemic has caused a significant decrease in FDI inflows into Vietnam since 2019 The consequences of the pandemic on the country's economy are an opportunity for The Government to assess the resilience, vulnerable sectors of the economy, and methods to cope with uncertainties, thereby taking appropriate solutions to effectively attract and maintain foreign investment in Vietnam, serves the industrialization process of the country It is thought that in the coming time, the Government and relevant ministries, branches, and localities need to implement some solutions to "retain" and promote foreign investment attraction Therefore, to learn more about our country's FDI, as well as offer solutions and strategic changes to strengthen FDI flows and attract FDI with higher added value and a more developed economy Therefore, our group chose the topic "Presenting an overview of Vietnam's FDI attraction 0 billion USD By the end of 2017, Vietnam will have attracted over 25,000 foreign direct investment projects with a total registered investment of more than 333 billion USD Up to now, 129 countries and territories have invested in Vietnam FDI projects have been present in 63 out of 63 localities FDI capital has also been invested in 19/21 production and business lines in Vietnam (Ministry of Finance, 2018) According to the Foreign Investment Department Ministry of Planning and Investment, in 2019, FDI capital into Vietnam reached 38.95 billion USD, up 7.2% compared to 2018 In 0 which, the number of projects registered to contribute newly granted investment registration certificates is 3883, with a value of 16.75 billion USD, making Vietnam one of the most attractive countries for foreign investors  Vietnam's attraction situation from 2019 to 2020: FDI attraction in 2020 will reach 28.53 billion USD According to a report by the Ministry of Planning and Investment, as of December 20, 2020, the total newly registered capital, adjusted and contributed capital, and purchased shares of foreign investors reached 28.53 billion USD, equal to 75% over the same period in 2019 The realized capital of foreign direct investment projects is estimated at 19.98 billion USD, equal to 98% over the same period in 2019 Due to the impact of the COVID-19 pandemic, production and business activities were affected The realized investment capital of foreign investment projects in 2020 decreased compared to 2019 but the reduction level has been improved improved (down 2% from 2019) Many foreign-invested enterprises are gradually recovering and maintaining good production and business activities while expanding projects The highlight in 2020 is adjusted investment capital reaching over $6.4 billion, up 10.6% over the same period in 2019 There were 1,140 projects registered to adjust investment capital, down 17.5% compared to the same period last year with the same period Regarding newly registered capital, there were 2,523 new projects granted investment registration certificates, down 35% over the same period, total registered 0 capital reached 14.65 billion USD, down 12.5% over the same period last year 2019 For capital contribution and share purchase, there were 6,141 times of capital contribution and share purchase by foreign investors, down 37.6% over the same period, the total value of contributed capital was $7.47 billion, down 51.7 % over the same period The structure of the value of capital contribution to buy shares in total investment capital also decreased compared to the same period in 2019, from 40.7% in 2019 to 26.2% in 2020 Foreign investors have invested in 19 industries and sectors, in which the processing and manufacturing industries lead the way with a total investment capital of 13.6 billion USD, accounting for 47.7% of the total registered investment capital The field of electricity production and distribution ranked second with a total investment capital of over 5.1 billion USD, accounting for 18% of the total registered investment capital Next are the fields of real estate business, whole, sale, and retail, with a total registered capital of nearly 4.2 billion USD and over 1.6 billion USD In 2020, 112 countries and territories invested in Vietnam, with Singapore leading the way with a total investment of nearly USD billion, accounting for 31.5% of total investment capital in Vietnam Korea ranked second with a total investment capital of over 3.9 billion USD, accounting for 13.8% of total investment capital China ranked third with a total registered investment capital of 2.46 billion USD, accounting for 8.6% of total investment capital Next are Japan, Hong Kong In terms of the number of Taiwan, new projects, Korea ranks first with 609 projects China ranked second, with 342 projects Japan ranked third with 272 projects Hong Kong ranked fourth with 211 projects Foreign investors have invested in 60 provinces and cities across the country in 2020, in which, Ho Chi Minh City takes the lead with a total registered capital of 4.36 billion USD, accounting for 15 3% of total investment capital Bac Lieu province ranked second with 01 large projects with an investment capital of billion USD, accounting for 14% of total registered investment capital Hanoi ranked third with nearly 3.6 billion USD, accounting for 12.6% of total investment capital Next is Ba Ria - Vung Tau province, Binh Duong, Hai Phong city In terms of the number of new projects, Ho Chi Minh City still leads with 950 projects Hanoi city ranked second with 496 projects Bac Ninh province ranked third with 153 projects) 0 The export turnover of the foreign investment sector continued to increase and increased more strongly than in the first 11 months of 2020 Exports, including crude oil, reached 202.4 billion USD, up 9.2% over the same period, accounting for 72.3% of export turnover Exports excluding crude oil reached $200.8 billion, up 9.6% over the same period in 2019, accounting for 71.7% of the country's export turnover in 2020 The imports of the foreign investment sector reached 167.8 billion USD, up 12.3% over the same period and accounting for 64.3% of the total import turnover of the whole country In general, in 2020, the foreign investment sector has a trade surplus of 34.6 billion USD including crude oil, and a trade surplus of 33 billion USD excluding crude oil, making up for the deficit of 15.6 billion USD of the domestic sector helping to have a trade surplus of nearly 19 billion USD  Some big projects in 2020  Bac Lieu liquefied natural gas power plant project is managed by the Bac Lieu Thermal Power Center (Singapore), with a registered investment capital of USD billion and the goal of producing electricity from liquefied natural gas (LURC grant dated 16/02) in January 2020)  Southern Vietnam Petrochemical Complex (Thailand) project in Ba Ria-Vung Tau province, increased investment capital by 1,386 billion (adjusted investment certificate issued on April 18, 2020)  The West Lake West Urban Area Project (Korea) in Hanoi City has been revised to increase investment capital by more than 774 million USD (adjusted investment certificate issued on June 29, 2020)  Project Pegatron Vietnam (Taiwan), 481 million USD investment capital with the goal of manufacturing game equipment, phone accessories, smart speakers, game controllers, and computer types in Hai Phong city (issued with the Investment Certificate on October 30, 2020)  Radian Jinyu (Vietnamese) Tire Factory Project, USD 300 million investment by Chinese investors in Tay Ninh province to produce all-steel TBR tires (issued with IRC on August 21st) January 2020) 0 An Overview of FDI Attractions in Vietnam in the period 2010-2020 Registered FDI capital varied constantly from 2010 to 2014, increasing slightly from 19.89 billion USD in 2010 to 21.92 billion USD in 2014 Since 2015, the total registered FDI in Vietnam has risen The South has witnessed a steady rise in 0 population If overall investment capital in Vietnam was 22.7 billion dollars in 2015, it has risen to 38.95 billion dollars by 2019 has risen to 38.95 billion dollars by 2019 Due to the impact of the COVID-19 pandemic, the global economy was seriously affected, so foreign investment capital registered in Vietnam had a sharp decrease, reaching only 28.53 billion USD, down 25% compared to 2019 Figure 2.2: Total registered FDI capital in Vietnam Source: Author's compilation from Foreign Investment Department Between 2015 and 2019, registered capital climbed from 14.5 billion USD to 20.38 billion USD, while realized FDI increased from 14.5 billion USD to 20.38 billion USD; the number of newly registered investment projects increased from 1,843 in 2015 to 3,883 in 2019 The broad impact of the COVID-19 epidemic will have an impact on enterprise production and business operations, whether small, retail, or big, and hence FDI initiatives Both registered capital and newly registered projects declined in Vietnam, although realized 0 capital only decreased marginally, reaching 98% in comparison to 2019 Table 2.1: Amount of capital and FDI projects in Vietnam in the period 2010-2020 0 Source: Author's compilation from Foreign Investment Department a) In the field of investment Foreign investors have invested in 19 industries between 2010 and 2020, with the processing and manufacturing industry attracting the most attention With total freshly and extra registered capital varying between USD 13 and USD 24 billion, it accounts for a significant portion of overall registered investment capital (40 – 70 percent) In addition, real estate, wholesale, and retail, as well as power generation and distribution, are among the businesses that get foreign direct investment By the end of 2019, the processing and manufacturing industry will have garnered the most investor interest, accounting for 59 percent of total registered capital with a 0 total registered capital of 214.6 billion USD This field has the most investment projects, with 14,463 projects accounting for 46.7 percent of the total number of projects With a total registered capital of 58.4 billion USD, real estate came in second (accounting for 16 percent of the total registered capital) With the presence of wellknown global firm’s l as CapitaLand, Sunway Group, Mapletree, Kusto Home, and others, the percentage of investment capital in real estate commercial operations has increased significantly Meanwhile, the production and distribution of electricity, gas, hot water, steam, and air conditioning accounted for 6.5 percent of the total registered capital With 800 newly granted projects, 680 projects with adjusted investment capital, and 1268 times of capital contribution, foreign investors bought shares with a total capital of 13,601 billion USD, accounting for 47.67 percent of total investment capital in 2020, the processing and manufacturing industry attracted the most attention from foreign investors The generation and distribution of electricity, gas, and steam came in second with USD 5.1426 billion, accounting for 18.03 percent of total investment capital With 4.18495 billion USD, real estate came in third, accounting for 14.67 percent of total investment capital Processing technology, real estate, power generation and distribution, housing and food services, and other businesses, in general, receive the greatest FDI b) Regarding investment partners According to the General Statistics Office, by the end of 2020, Vietnam would have drawn a total registered capital of over 377 billion USD from nations and territories, with a total of 33,148 projects Ten countries have pledged capital totaling more than ten billion dollars Korea is first, with 69.3 billion USD in total registered 0 capital and 9,149 investment projects (representing 18.3 percent of total investment capital); Japan is second, with 60.1 billion USD and 4,674 investment projects (representing nearly 15.9 percent of total investment capital); Singapore, Taiwan, Hong Kong, and China are 10 third, with 14.8 percent, 8.9 percent, 6.6 percent, and 4.7 percent, respectively 0 Figure 2.3: Structure of major FDI partners in Vietnam accumulated until 2020 Source: Compiled from the General Statistics Office The number of nations and territories investing in Vietnam is growing between 2016 and 2020 By the end of 2020, the total number of nations and territories will have risen to 139 Korea is the country in Vietnam with the greatest investment capital, accounting for 17–20 percent of total FDI capital Japan comes in second with investment capital that varies between 14 and 17 percent of overall FDI in Vietnam In addition to the two countries with large amounts of FDI mentioned above, Vietnam received a lot of FDI investments from other countries and territories in the 2016-2020 period, including China, Malaysia, Singapore, Taiwan, Hong Kong, and others c)Conclusion Vietnam has made great progress in luring FDI into socio-economic development between 2010 and 2020 Despite its remarkable FDI investment achievements, Vietnam is still not the most appealing nation in the ASEAN area for foreign investors Many multinational firms have selected Thailand, Malaysia, Indonesia, and other ASEAN countries to invest in because they provide the most competitive investment climate in the region, as well as assist sectors that develop and create favorable circumstances for FDI enterprises As a result, Vietnam's strategy should be revised to increase FDI inflows and attract higher-value-added FDI 11 0 7.Attracting FDI into Vietnam after the COVID-19 epidemic a) FDI inflows since the COVID-19 outbreak Faced with the detrimental effects of the COVID-19 pandemic, worldwide FDI inflows in 2020 fell by 42% from $1.5 trillion in 2019 to barely $859 billion It's the lowest it's been since the 1990s (and 30 percent lower than during the global financial crisis of 20082009) When the economy flourished in 2019, FDI inflows into Vietnam decreased In particular, FDI projects disbursed 19.98 billion USD in 2020, an increase of 98 percent over the same time in 2019; total newly registered capital, adjusted, and contributed capital to acquire shares totaled 28.53 billion USD, an increase of 75 percent 0 over the same period in 2019 Inflows of foreign direct investment into Vietnam are expected to drop in 2020 FDI is expected to increase again in 2021 According to statistics from the Ministry of Planning and Investment, as of April 20, 2021, total newly registered capital, adjusted capital and capital contribution, and share purchases by foreign investors reached 12.25 billion USD; the implemented capital of FDI projects is estimated at 5.5 billion USD (increasing by 6.8 billion USD over the same period in 2020), and 451 new projects were granted investment registration certificates (down 54.2% over the same period) Total registered capital reached nearly 8.5 billion USD (up 24.7% over the same period in 2020) Figure 2.4: FDI attraction in the first months of 2021 (Unit: Billion USD) 12 0 Source: VnEconomy Looking at the data of FDI attractions in the seven months of 2021 just announced by the Ministry of Planning and Investment, there are signs that FDI attraction work has been affected due to the COVID-19 epidemic Specifically, according to published data, as of July 20, 2021, the total registered FDI capital reached 16.7 billion USD (down 11.1% over the same period in 2020) This is the strongest decrease since the COVID-19 epidemic broke out again in late April 2021 and early May 2021 in Vinh Phuc, Bac Ninh, and Bac Giang provinces Nonetheless, there are some bright spots in the FDI attraction picture That is, FDI inflows into Vietnam climbed by 3.8 percent to USD 10.5 billion in 2020, compared to the same period in 2019 0 Furthermore, many FDI businesses recovered and maintained solid ... DEVELOPMENTS OF VIETNAM''S FDI ATTRACTION IN THE PERIOD 2010- 2020 1 .The situation of Vietnam in the period 2010- 2020 According to the financial health ranking of 66 emerging economies by The Economist (2020) ,... invested in 19/21 production and business lines in Vietnam (Ministry of Finance, 2018) According to the Foreign Investment Department Ministry of Planning and Investment, in 2019, FDI capital into... after the COVID-19 pandemic 19 In the period 2010 - 2019, FDI inflows into Vietnam tended to increase in terms of the number of projects, the amount of registered capital, and the amount of implemented