Vietnam- Japan: Economic allies

(VLR) (Vietnam Logistics Review) After the official visits to Vietnam by Japan’s PM Shinzo Abe in January 2017 and by Japan’s Imperial Couple at the end of February, 2017, achievements from the visit to Japan by PM Nguyen Xuan Phuc at the beginning of last June were convincing proofs for more efficient and practical economic cooperation between the two countries.

(Vietnam Logistics Review) After the official visits to Vietnam by Japan’s PM Shinzo Abe in January 2017 and by Japan’s Imperial Couple at the end of February, 2017, achievements from the visit to Japan by PM Nguyen Xuan Phuc at the beginning of last June were convincing proofs for more efficient and practical economic cooperation between the two countries.

PM Nguyen Xuan Phuc welcoming Japan PM Shinzo Abe in his visit to Vietnam (January 2017)

Sustainable partner relationship

Diplomatic relationship between Vietnam and Japan was established on September 21st, 1973. In recent years, it has been blooming. Japan has been an important economic partner of Vietnam. This is the first country in G7 that established strategic partnership relationship with Vietnam (2009), recognized Vietnam’s market economic regulations (October 2011) and invited Vietnam to join Extended G7 Summit (May 2016).

Japan is the largest ODA provider to Vietnam, accounting for 30% of total ODA commitments of the world community to Vietnam. From 1992 to the end of the financial year of 2015 (March 31st, 2016), Japan committed around USD 29.5 bn of loan capital to Vietnam. In PM Abe’s visit at the beginning of this year, Japan committed to provide ¥ 120bn (around USD 1.05 bn) of ODA for the financial year 2016 for 4 projects.

Japan is the second largest foreign direct investment partner (FDI) with USD 42 bn from 1,500 enterprises, accounting for 15% of total FDI to Vietnam, the third largest partner in the field of tourism (in 2016 there were 750,000 Japanese tourists visiting Vietnam) and the fourth largest partner in the field of trade (bilateral trade exchange turnover reached around USD29.7 bn in 2016). Cooperation in other fields as science- technology, education- training, culture, sports, tourism and environment has had remarkable developments. And Vietnam and Japan have had good cooperation at multi-lateral forums as UN, ASEAN, APEC, and ASEM… Both signed Agreement on Encouragement and Protection of Investments (December 2004), Vietnam- Japan Economic Partnership Agreement (VJEPA) (October 2009)…creating convenient legal framework for developments of economy and trade between the two countries. Currently, Japan has actively support Vietnam to develop 6 sectors chosen from Vietnam’s Strategy of Industrialization (automobile and spare parts, agricultural machinery, agricultural and aqua product processing industry, energy saving and ship building) in cooperation framework between the two country to 2020, vision 2030.

PM Nguyen Xuan Phuc and PM Shinzo Abe signing the Document of Cooperation between the two countries (June 2017)

To the new stature

In the framework of PM. Nguyen Xuan Phuc’s official visit to Japan, both sides signed 14 important documents, besides memorandums and cooperation agreement among ministries, sectors, and organizations, there were some other remarkable documents. (1) exchange diplomatic notes for 4 ODA projects worth ¥ 100.3 bn, equally to USD 912m (including maritime safety and security protection; water management in Ben Tre; sewage and waste water treatment system in Bien Hoa city, phase 1; developing Hoa Lan Hitech zone phase (2) exchange diplomatic notes for non-refundable projects worth ¥2,93 bn, equally to USD 26.6m (including operating storage pond in case of emergency and flood efficient management by a comprehensive information management system, JDS human resource development scholarship program 2017, JDS human resource development scholarship program 2018). (3) ODA agreement for project of developing Hoa Lac hitech infrastructure (phase 2).

In Investment Promotion Conference by the Ministry of Planning and Investment, together with Japan External Trade Organization, held in Tokyo on June 5th, 2017 and with the participation of PMs from both countries and 1,500 enterprises, many cooperation agreements have been signed, totally worth USD 22bn. Nghi Son Thermal Power Plant, after many years of waiting, has received investment registration certificate. The plant by Marubeni (Japan) and KEPCO (Korea) is operated in form of BOT with total investment of USD 2.8bn and with capacity of 1,200MW. Two others Japanese projects received investment certificates were Aeon Mall Trade Center in Ha Dong (Hanoi) and Sakura Golf Course Project (Hai Phong).

“Japan is the second largest foreign direct investment partner (FDI) with USD 42 bn from 1,500 enterprises, accounting for 15% of total FDI to Vietnam, the third largest partner in the field of tourism (in 2016 there were 750,000 Japanese tourists visiting Vietnam) and the fourth largest partner in the field of trade (bilateral trade exchange turnover reached around USD29.7 bn in 2016) ”

The largest one was probably the cooperation agreement between BRG and Sumitomo Group on developing a smart city in the area of North Hanoi (along Nhat Tan- Noi Bai Route), worth over USD 4bn. At the same time, FECON J.S Co, FECON Infrastructure Incorporate (FCI), East Nippon Expressway Company(NEXCO) and Japan Expressway International Company Limited( JEXWAY) signed strategic cooperation agreements in the fields of investments, transport infrastructure development projects. Besides, there have been many agreements that have been signed. For example, TH Group signed an agreement with International Total Engineering Corporation (ITEC) to develop TH Hi-tech Medical and Health Care Unit at Hanoi or agreement on researching coal transshipment port in Ba Ria- Vung Tau to serve thermal plants…

Billion- dollar handshakes have been promising signals, proving the Japan- Vietnam economic cooperation, which has been closed, practical and efficient, is being brought to a new stature in the coming time.

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