Japanese Businesses Expect to do Business in Vietnam
The survey on the current status of Japanese enterprises investing abroad in 2023 was conducted by JETRO among those investing in 20 countries and regions in Asia and Oceania. Among the 4,982 valid responses, 849 Japanese enterprises operating in Vietnam accounted for the highest number in the surveyed countries and territories.
According to Takeo, the proportion of Japanese enterprises in Vietnam expecting to be “profitable” in 2023 was 54.3%, which was 6.6 points lower than the ASEAN average of 60.9%. The proportion of businesses reporting “losses” is 24.4% (an increase of 3.6 points compared to the previous year).
The representative of JETRO explained that the main reasons for this rate include the downturn in domestic and international consumer demand and the increase in procurement costs, labor costs, and competition with rival companies.
Regarding the business profit outlook for 2024, the forecast for “improvement” stands at 50.4%, “stagnation” at 41.3%, and 8.3% of enterprises believe it will “worsen”.
In terms of business expansion plans for the next 1 to 2 years, the proportion of enterprises planning to expand their business in Vietnam is 56.7%, a decrease of 3.3 points compared to the previous year. Although the ambition to expand remains high, the response rate for expansion in Vietnam has decreased compared to the previous year.
Notably, regarding the trend of local procurement in the next 1-2 years, the proportion of enterprises responding they will “expand” in Vietnam is 43.2%, significantly higher than the ASEAN average of 28.8%. By country and region, this rate is only behind India and Pakistan, ranking at the top in the ASEAN region.
Deputy Minister of Planning and Investment Nguyen Thi Bich Ngoc highly appreciated JETRO’s role in supporting enterprises and promoting the improvement of Vietnam’s investment climate, especially considering JETRO’s survey as an important document for Vietnamese ministries, sectors, and localities.
The deputy minister stated that to continue developing the domestic market size and stabilize the macro environment, and the political and social situation, the Vietnamese Government and its agencies and ministries are always striving to implement synchronized solutions to address and overcome existing difficulties, and invest in technical infrastructure, enhance education and training, improve the quality of vocational training, and strengthen the coordination between the state, institutes/schools, and enterprises.
With a long tradition of cooperation between Vietnam and Japan and the “Comprehensive Strategic Partnership for Peace and Prosperity in Asia and the World”, Deputy Minister Ngoc asked JETRO to continue closely coordinating with the MPI to address specific issues, soon facilitate favorable investment conditions for Japanese enterprises, ensure good profitability, continue to expand business activities, and create jobs for the people of Vietnam.
