The Strategies and Qualifications of Vietnam in Attracting Foreign Direct Investments

• Main Authors: Chung-Han Li, 李中瀚
• Other Authors: Ching Lung Tsay
• Format: Others
• Language: zh-TW
• Published: 2010
• Online Access: http://ndltd.ncl.edu.tw/handle/08931312757840028612

碩士 === 淡江大學 === 東南亞研究所碩士班 === 98 === Since the Innovation policy in 1986, the number of foreign corporations investing in Vietnam has gradually increased. It has now become one of the countries in ASEAN that attracts the highest amount of foreign direct investments. However, early in the Reform and Opening-Up Policy, Vietnam did not get a lot of foreign direct investments. It was only till recent years that the amount has noticeably increased. To this end, I have analyzed the changes in investment trends of the last 20 years in Vietnam, and the strategies that the central government used to improve the image of investment potential in Vietnam, through changes in recruitment companies and others. References will be made to Kojina and Ozawa’s Macroeconomic approach (1973 & 1979), Vernon’s Product Life Cycle Theory (1966), and Dunning and Narula’s Investment Development Path (1973 & 1979) for analysis purposes. Both Macroeconomic approach and product life cycle theory can explain why corporations needed to move the production line to a place with lower manufacturing cost, which is a key in countries like Vietnam to attracting foreign investors. Investment Development Path explains the level of a country’s development, and the influence in capital flow. This thesis takes on the approach of quantitative and qualitative secondary data analyses. Through the examination of statistical numbers and various human affairs in the country, I will present a comprehensive analysis of the strategies and qualifications of Vietnam in attracting foreign investments. This thesis will present the following points of discussion: 1. Vietnam offers two advantages: a young energetic labor force with relatively low labor costs, and a land with high amounts of natural resources. Both of these are basic qualifications for drawing foreign investments. Although at the beginning, the business environment in Vietnam as a whole was not yet fully established, and bears high investment risks; therefore, it did not receive a high amount of foreign investments. 2. The political and social environments of Vietnam is one of the most stable ones out of the developing countries in Southeast Asia; this becoming more apparent especially after the Asian financial crisis. Vietnam has been continually developing its infrastructure, solidifying its legal system and administration. In recent years, since the economy of China has taken off, Hanoi government has been working in partnership with China in order to increase its own competitiveness in attracting foreign businesses. Because of the continual improvements made in the domestic investment environment, and its diplomatic relationships with other countries, Vietnam has been receiving more foreign investments. 3. After the financial crisis that afflicted Southeast Asian countries, Vietnam has proven itself to be one of the least affected countries, thereby increasing its competitive edge in attracting foreign corporations.