In today's rapidly evolving global economy, Việt Nam is making bold moves to attract foreign direct investment (FDI) and position itself as a competitive hub in Asia. The country's ambitious targets, outlined in the Politburo's Resolution No10-NQ/TW, aim to bring in $200-300 billion in FDI over the next five years, with a focus on quality and long-term sustainability. Personally, I find this approach particularly intriguing, as it goes beyond mere numbers and delves into the heart of economic development.
The FDI Landscape in Việt Nam
Việt Nam has already made significant strides, attracting around $550 billion in FDI and contributing to economic growth, industrialization, and modernization. The latest figures for the first half of 2026 show a promising 61% increase in registered foreign investment, with realized FDI reaching $13.03 billion. This momentum, coupled with Việt Nam's favorable location, abundant labor force, and improving business environment, suggests that the country is on track to meet its FDI attraction targets.
However, as the saying goes, 'the higher you climb, the harder you fall.' Việt Nam faces increasing challenges as global uncertainties impact growth, inflation, and capital flows. The competition for international investment is intensifying, and Việt Nam must identify its unique advantages and address bottlenecks to stay ahead.
Unlocking Việt Nam's Potential
The resolution sets specific goals, including attracting investment from developed economies with advanced technology and management capabilities. It aims to bring in multinational corporations to establish innovation centers, data centers, and regional headquarters. Additionally, Việt Nam seeks to integrate small and medium-sized foreign enterprises with specialized technologies into its global value chains.
One of the key targets is to increase the localization rate in key industries to 45-50% and integrate more domestic enterprises into FDI supply chains. By 2045, the vision is for the foreign-invested economic sector to be closely connected with the state and private sectors, positioning Việt Nam as a leading Asian hub for production, services, and innovation.
Addressing Challenges and Strengthening Links
Takuya Sahashi, Vice President of Mitsubishi Corporation Việt Nam, highlights the need to improve the technical capacity and quality of domestic suppliers. Upstream industries, such as key materials and components, require development to reduce import dependence. While support policies for small and medium-sized enterprises exist, many firms struggle to access them due to bureaucratic hurdles.
Sahashi suggests a targeted approach, focusing on high-potential domestic enterprises, and strengthening business connections and information access. Expanding supplier databases and business-matching platforms, as well as improving vocational training and practical skills, are essential to enhance technology transfer and absorption.
From a capital markets perspective, Dominic Scriven, Chairman of Dragon Capital, emphasizes the resolution's focus on capital quality. He highlights the challenge of businesses' cost of capital and suggests mechanisms to encourage FDI enterprises to retain profits in Việt Nam. Developing suitable interest rate mechanisms for USD deposits held by foreign-invested enterprises could provide a stable foreign currency source for the economy.
Michael Kokalari, Chief Economist at VinaCapital, underscores the importance of continued investment in large-scale infrastructure and the need to expand and improve the quality of the capital market. Accelerating State-owned enterprise equitisation and initial public offerings will be crucial in attracting more international investors.
Conclusion: A Journey Towards Sustainable Development
The positive FDI performance in the first half of 2026 is a promising sign for Việt Nam's economic future. However, maintaining this momentum and improving the quality of capital inflows require a multi-faceted approach. Việt Nam must continue to enhance its investment environment, develop infrastructure, strengthen domestic enterprises, and promote substantive links between the FDI and domestic sectors.
As Việt Nam navigates these challenges, it has the potential to become a true powerhouse in the Asian economic landscape. The journey towards achieving these ambitious goals will undoubtedly be challenging, but with the right strategies and a focus on sustainable development, Việt Nam can write a success story that inspires other emerging economies.
