Cooperation opportunities between Vietnam-Japan following new trends

Investment cooperation between Vietnam and Japan in upcoming time should pay more attention to new trends in which most nations are inclining towards strategic products and identifying reliable partners.

Affirmed by Dr. Vo Tri Thanh, Director of the Institute for Brand Strategy and Competition, the potential for cooperation between Vietnam and Japan is remarkable. However, “we are now living in an era where the frequency and intensity of uncertainty are rising to peak. Geopolitics, epidemics, climate change, natural disasters, finance – currency have raised new scenario”, Dr. Vo Tri Thanh commented.

New scenario also results to a shift in global supply chains and value chains. Mr. Thanh said that there are 4 noticeable issues regarding the trend of supply chain shifting which closely associated to the region.

First, the Asia-Pacific plays a major role to the global production network thanks to its comparative advantage, and trade and investment liberalization has been accelerated in the past few decades.

Second, in recent years, the 4th industrial revolution and digital transformation have optimized supply chains leading to a tendency to its shrinking/shortening.

Third, geopolitical tensions, the US-China trade conflict, the Covid-19 pandemic have promoted new trends. In the supply chain, nations starts to pay more attention to strategic items such as masks and medical equipment during the pandemic, to mastering core technologies and identifying reliable partners.

Fourth, in the past 10-15 years, investors have discussed more often about the “China + 1” investment strategy from which Vietnam and ASEAN could take advantage. However, with the US-China trade conflict and the emergence of Covid-19, the supply chain shift is not simply an implementation of the “China + 1” strategy, but it is associated with a change in the investment strategies on core technologies, strategic products and identification of reliable partners.

Regarding bilateral cooperation in the value chain, Japan is still among the largest group of foreign investors in Vietnam in terms of accumulated registered capital. In particular, more than 65% of Japan’s FDI in Vietnam is concentrated in the processing and manufacturing industry.

However, a special point noted by Dr. Vo Tri Thanh is the cooperation of business lines and sectors. Two sides have established cooperation framework in a myriad of sectors like electronics, agricultural machinery, agricultural product processing, environment, energy saving, shipbuilding, and supporting industries.

Vietnamese businesses need to pay attention to the sectors attracting investment from Japan such as logistics, high-tech agriculture, real estate, finance – banking, tourism, retail, aviation, and information technology and infrastructure.

Domestic enterprises should consider expanding cooperation with Japan in new sectors, such as smart cities, building technology incubators to develop start-ups. Recently, Vietnam has consulted foreign investors about multiple investment sectors,  especially considering the advantages, comparing and enhancing the role of Vietnam in the medical equipment supply chains because of the country’s advantages in this filed.

However, from the Central Institute for Economic Management (CIEM), Mr. Nguyen Anh Duong, Head of Department has stated that participation degree of Vietnamese enterprises in the supply chain led by Japanese enterprises is still relatively limited and slowly improved. To enhance the efficiency of Vietnam-Japan cooperation in the value chain, Mr. Duong has suggested that a number of tasks must be prioritized such as controlling Covid-19 effectively and ensuring labor supply; drastically implementing the program of economic recovery and development; creating new impulse for improving the investment – business environment; strengthening trust in the cooperation relationship between foreign-invested enterprises and domestic enterprises.

In a broader perspective, GS. Mie Oba, Faculty of Law, Kanagawa University (Japan) said that Vietnam and Japan need to take advantage of the CPTPP and RCEP agreements, and other multilateral cooperation frameworks to deal with uncertainties and challenges of the region.

“The two parties can focus on free and open orders to promote regional prosperity and improve joint regulation in cross-border trade,” Prof. Mie Oba recommended.

(Source:baodautu)

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