Bài Tiểu Luận International Buiness Thương Mại Quốc Tế Đề Tài The Contributions Of Foreign Direct Investments In Vietnam.pdf

ĐẠI HỌC DUY TÂNKHOA QUẢN TRỊ KINH DOANH

-& -BÀI TIỂU LUẬNINTERNATIONAL BUINESS

THƯƠNG MẠI QUỐC TẾ

Đề tài: The contributions of Foreign DirectInvestments in Vietnam

2.1 The specific contributions that FDI brings to the business market in Vietnam are shown below 4

2.2 Policies for the government to promote FDI activities in Vietnam

1.2 Đặc điểm của FDI 10

1.3 Vai trò của FDI 11

II Nội dung 12

2.1 Những đóng góp cụ thể mà FDI mang lại cho thị trường kinh doanh tại Việt Nam được thể hiện dưới đây 12

2.2 Các chính sách của chính phủ nhằm thúc đẩy hoạt động FDI tại Việt Nam 14

III Phần kết luận 15

IV Tham khảo 16

PHẦN TIẾNG ANH (ENGLISH)

The contributions of Foreign Direct Investments in Vietnam

Foreign Direct Investment (FDI) has played a significant role in the economic growth and development of Vietnam over the past few decades Since the introduction of economic reforms in the 1980s, Vietnam has become an increasingly attractive destination for foreign investors, particularly in the manufacturing sector In recent years, the Vietnamese government has always attached great importance to attracting foreign investment The Government pays special attention to the implementation of legal programs, constantly improving the investment environment, creating favorable conditions for domestic and foreign enterprises Therefore, foreign direct investment is an important factor contributing to the economic growth of the host economies In developing countries in general and Vietnam in particular, countries with developing economies, FDI has created opportunities to access capital sources and jobs, transfer technology and production techniques Because of these benefits, developing economic platforms have considered attracting FDI as a driving force in their economic development strategies and actively making efforts to improve market conditions and investment environment in Vietnam target attract foreign investors Vietnam is a relatively old integrated country but an active participant in international trade Since implementing economic renewal policies (since 1986), Vietnam has pursued trade liberalization and the development of a socialist-oriented market economy - the path that has brought Vietnam out of the country low-input water into low-medium input water Vietnam's efforts have been successful, reflected in the stable and upward trend of FDI inflows Determined to integrate into the world economy.

I Introduction:

1.1 What is FDI ?

Foreign direct investment (FDI) is the process whereby residents of one country (the source country) acquire ownership of assets in another country (the host country) for the purpose of controlling the production, distribution and other activities of a firm in that country Foreign direct investment is an investment by a company in a country other than that in which the company is based It is also defined as cross border investment made by a resident in one economy in an enterprise in another company.International direct investment is a form in which foreign investors invest all or a sufficiently large part of their capital in projects in order to gain the right to operate the subjects they invest their capital in In recent years, this form occupies a dominant position in international investment.

Foreign direct investment (FDI) is an integral part of an open and effective international economic system and a major catalyst to development Yet, the benefits of FDI do not accrue automatically and evenly across countries, sectors and local communities National policies and the international investment architecture matter for attracting FDI to a larger number of developing countries and for reaping the full benefits of FDI for development The challenges primarily address host countries, which need to establish a transparent, broad and effective enabling policy environment for investment and to build the human and institutional capacities to implement them.

1.2 Characteristics of FDI :

FDI is mainly private investment with the primary purpose of seeking profit.

Foreign investors must contribute a minimum percentage of capital in the legal capital or charter capital depending on the provisions of the laws of each country in order to gain control or participate in controlling the investment enterprise.

The distinguishing feature of FDI, in comparison with other forms of international investment, is the element of control over management pol- icy and decisions FDI argues that the element of control gives direct investors an informational advantage over foreign portfolio investors and over domestic savers Many firms are unwilling to carry out foreign investment unless they have 100% equity ownership and control Others refuse to make such investments unless they have at least majority control (that is, a 51% stake) To indulge in cooperative FDI arrangements, where several firms participate and no single party holds majority control (for example, joint ventures).

1.3 The role of FDI :

Vietnam attracted foreign investment from 130 countries and abroad with a total registered capital of morethan 340 billion USD at the end of 2018.

The role of FDI is very clearly stated by contributing to important factors of growth such as replenishing investment capital, promoting exports, transferring technology, developing human resources and creating work, With the development of science and technology and the process of international economic integration, it is essential to take advantage of foreign capital to develop Vietnam's economy.

The attraction of FDI capital contributes to supplementing investment capital for social development and economic growth, improving industrial production capacity, restructuring the economy, participating in the global production network and bringing Vietnam's economy into integration with the world economy.

In addition, FDI also greatly contributes to creating budget revenue and promoting Vietnam's deep integration into the world economy Thanks to the important contribution of FDI, Vietnam has achieved high economic growth in recent years and is known as a country that promotes its capacity, innovates, and attracts the attention of the community international FDI plays an important role in the country's economic development in recent years.

However, FDI also has certain limitations: FDI only goes to countries with a stable political and economic environment and an attractive investment environment If the investment recipient country does not have a detailed, specific and scientific investment plan, it can easily lead to rampant investment, natural resources and resources being exhausted, difficult to arrange investment by industry and territory; if not strictly appraised, it is possible to import outdated equipment and technology; If the competition policies and laws are not adequate, it is easy to lead to the situation of foreign enterprises oppressing domestic enterprises Therefore, in order to avoid some limitations caused by FDI enterprises, affecting the sustainable development of the economy, our country needs to focus on implementing the above solutions in an effective manner.

II Content:

2.1 The specific contributions that FDI brings to the business market inVietnam are shown below:

Structure of foreign investment model and top 10 foreign investors in Vietnam.

Nguồn: Báo điện tử Chính phủ South Korea and Japan are the countries with the largest total investment capital in Vietnam, followed by Taiwan, British Virgin Island, Hong Kong and China.

Meanwhile, the US and Europe, although the two main export markets, bring a large export surplus to Vietnam, but FDI inflows from these markets into Vietnam are still quite limited Foreign investors have invested in 19/21 industries in the national economic sub-sector system, in which the processing and manufacturing industry is still the field that attracts the most FDI.

Boosting economic growth:

FDI has been a key driver of Vietnam's impressive economic growth over the past few decades Between 1995 and 2019, Vietnam's GDP grew at an average rate of 6.7% per year, with FDI playing a major role in this growth FDI has contributed significantly to Vietnam's economic growth, accounting for a significant share of the country's gross domestic product (GDP) In 2020, FDI accounted for 20% of Vietnam's GDP FDI has played a major role in driving Vietnam's economic growth and diversifying the economy.

Creating jobs:

FDI has also helped to create employment opportunities for Vietnamese workers According to the Ministry of Planning and Investment, FDI projects have created around 4.5 million jobs in Vietnam to date FDI has helped to create jobs in various sectors, such as manufacturing, construction, hospitality, and services, thereby reducing unemployment rates in the country and supporting poverty reduction.

Infrastructure Development:

FDI has contributed to infrastructure development in Vietnam, particularly in transportation, energy, and telecommunications Many foreign companies have invested in building highways, bridges, power plants, and telecommunication networks, which has improved the overall quality of infrastructure in the country.

Increase in Exports:

FDI has helped to increase Vietnam's exports by establishing export-oriented industries and providing access to new markets FDI has helped to expand Vietnam's export markets, particularly in the manufacturing sector Many foreign companies have established factories in Vietnam to take advantage of low labor costs and favorable business environments, which has contributed to increasing Vietnam's exports to other countries FDI has spurred export growth in Vietnam, as foreign companies set up manufacturing bases and export their products to other countries, contributing to the country's trade surplus.

Improve business environment:

- FDI has played a crucial role in improving the business environment of Vietnam by introducing international business standards, promoting

transparency, and enhancing competition.

- FDI provides resources, capital and management experience for local businesses, helping to strengthen the competitiveness of domestic enterprises and develop new economic sectors.

- FDI expands Vietnam's slogan markets, giving local businesses the opportunity to develop their businesses and integrate more deeply into the global economy.

- FDI can create new jobs and increase employee income, contribute to reducing the number of unemployed workers, improve the business environment and improve the quality of life of the people in the country.

Technology transfer:

Foreign companies that invest in Vietnam often bring with them modern technology and management expertise, which has led to significant improvements in productivity and efficiency in various industries.

Besides the positive aspects, FDI also brings many difficulties to theVietnamese market:

Environmental impact: Rapid industrialization through FDI has led to

environmental degradation, including air, water, and soil pollution

- Foreign-invested enterprises can produce with destructive use of the natural resources of the country of origin such as water and land, leading to a reduction in forest areas, water reserves and the loss of natural resources degrade the quality of land, causing negative impacts on the natural environment

- Some investment enterprises may not comply with laws and regulations on the environment, violating people's rights and making it difficult for authorities and the community to manage and supervise their operations.

Income inequality: While FDI creates job opportunities, it has also led to

income inequality, as the earnings of foreign-owned firms generally exceed that of their domestic counterparts.

Dependence on foreign investment: Vietnam's high reliance on FDI means

that the country is vulnerable to external shocks, including changes in foreign investment flows and global economic conditions.

Brain drain: FDI has led to a loss of skilled labor as workers pursue higher

wages and better advancement opportunities abroad.

Labor exploitation: Labor standards in some foreign-owned firms have been

criticized, with concerns about poor working conditions, low wages, and forced

2.2 Policies for the government to promote FDI activities in Vietnam:Simplify administrative procedures:

Streamline and simplify administrative procedures for foreign investors, including business registration, permits, and licenses This would reduce red tape and save time and costs.

Enhance transparency:

Increase transparency and predictability of government policies and regulations to build confidence among foreign investors This would create a stable environment for foreign investors to do business.

Improve infrastructure:

Invest in infrastructure development, especially in transport, energy, and telecommunications, to support economic growth and improve the country's competitiveness This would help attract more FDI to the country.

Address corruption:

Tackle corruption and bribery, which can deter foreign investors from entering the market or create additional costs for existing investors This would help build trust and competitiveness for the Vietnamese business environment.

Strengthen legal framework:

Enforce intellectual property rights and strengthen legal protections for foreign investors, to protect their investments and enhance predictability in the market.

Labor market policies:

Improve labor market policies, including measures to upgrade human resources, provide vocational training, and promote social protection for workers This would help improve the skills of Vietnamese workers and create a more stable and competitive labor market.

Tax incentives:

Provide tax incentives and other benefits to attract FDI to priority areas, such as high technology, infrastructure development, and regional development This would provide more incentives for foreign investors to enter the market.

III Conclusion:

Currently, 58.2% of FDI capital focuses on the processing and manufacturing industry, creating over 50% of industrial production value, contributing to promoting the development of the country's economy However, the process of attracting FDI also reveals some limitations such as capital focusing on the field of labor application, technology transfer, invention

inventions, technical solutions that are not commensurate with investment capital.

Overall, FDI has played a vital role in Vietnam's economic growth and development, helping the country to become one of the fastest-growing economies in Southeast Asia FDI has brought about significant benefits to Vietnam's economy and development, however, these benefits come with some negative consequences As such, it is important to strike a balance between welcoming foreign investment and protecting domestic interests, including the environment, labor rights, and income distribution.