UK’s Financial Times reports investment flows to Vietnam

CA - The UK’s Financial Times has run an article saying that Vietnam’s investment climate is getting more attractive, especially with its cheap labour and political stability, which has convinced many foreign companies to invest in the country.

The paper reported on July 26 that Japan’s Mitsubishi Heavy Industries Aerospace (MHI) plans to build a factory to assemble wing flaps for Boeing. The company’s head, Hirotaka Masuda, was quoted as saying that wage costs in Thailand are already too high for his company to move there.

The article quoted a survey by the Japan Bank for International Co-operation (JBIC), which found that Vietnam even surpasses China and India as the most promising source of cheap labour.

Japan’s Daiwa Securities, has launched a Y40billion investment trust with two-fifths of its assets to be allocated to Vietnam, according to the article. Meanwhile, the Republic of Korea’s steelmaker Posco has announced that it will triple its stainless steel output in Vietnam by 2014 and is seeking permission to pump US$500m into a new electric arc furnace.

The Financial Times remarks that despite a drop from the previous year, the total foreign direct investment in Vietnam in 2009 remained significantly better than many economists had predicted at the height of the global crisis.