New Japanese gov’t likely to continue Abe’s policy for Viet Nam: JETRO economist

Thursday, Sep 10, 2020 11:23

Atsusuke Kawada, Chief Senior Economist at the Japan External Trade Organisation

Confirming Viet Nam and other ASEAN countries are very important partners for Japan in the fields of economics, politics and foreign affairs, Chief Senior Economist at the Japan External Trade Organisation (JETRO) Atsusuke Kawada told Vietnam News Agency about the likely diplomatic and economic policy for Viet Nam of the new Japanese government.

What are your thoughts on the relationship between Japan and Viet Nam, and between Japan and ASEAN under the leadership of outgoing Prime Minister Shinzo Abe, especially in the economic area and what do you think about PM Abe’s role in strengthening the relations?

Under the leadership of Prime Minister Shinzo Abe, I think that Japan and ASEAN were able to maintain and develop good economic relations.

Japan-Viet Nam economic relations have made great progress, with remarkable increases in bilateral trade, increased investment from Japan to Viet Nam, and increased mobility of people between the two countries. In particular, regarding the expansion of investment from Japan to Viet Nam, the number of Japanese companies expanding into Viet Nam was remarkable.

Looking at the number of member companies of the Japanese Chamber of Commerce in ASEAN regions, the number of member companies of the Japanese Business Associations in Viet Nam (in all three bases in Ha Noi, HCM City and Da Nang) has exceeded that of the Japanese Chamber of Commerce in Bangkok, Thailand, which had been the largest. I think that Japanese companies' interest in Viet Nam has risen further during the Abe administration.

Also, during the Abe administration, cooperation between Japan and Viet Nam in terms of infrastructure development was remarkable: not only constructing hard infrastructure, such as the Ha Noi-Noi Bai International Airport, the highway connecting the airport to Ha Noi City, and the Nhat Tan Bridge (also known as the Japan-Viet Nam Friendship Bridge), but also in cooperation with soft infrastructure, such as the establishment of Viet Nam-Japan University.

Prime Minister Abe himself made a great contribution in terms of creating an environment in which Japanese companies can easily conduct business activities in Viet Nam, through visiting Viet Nam as the first outing destination and building extremely good relationships with Prime Minister Nguyen Xuan Phuc and other Vietnamese leaders.

After PM Abe decided to resign last month, many people in Viet Nam are extremely interested in whether the new Japanese Government will change its diplomatic policy towards Viet Nam and ASEAN. What do you think about the future relationship between Japan and Viet Nam under the new leadership and what should the two countries do to further strengthen the bilateral relations, especially in the economic area?

I think that the Japanese government's diplomatic policy for Viet Nam will continue the policy of the Abe administration. This is because Viet Nam and other ASEAN countries are very important partners for Japan in the fields of economics, politics, and foreign affairs.

Through the annual dialogue, existing FTAs/EPAs between Japan and ASEAN countries, the framework of CPTPP (TPP11), APEC and RCEP, which is currently in the final adjustment stage, I think that the economic relationship between Japan and ASEAN will be further strengthened and deepened in general.

In order to further strengthen Japan-Viet Nam relations in the economic area, I think that it is necessary to further activate human resource exchanges between the two countries and build a mutually complementary win-win relationship. And, I also expect that the number of investment projects by Vietnamese companies in Japan will increase.

Regarding the former, Japanese companies, facing the declining birthrate and aging population, need more Vietnamese hard-working and talented human resources, and it is possible for Vietnamese people to acquire various technologies and know-how from their work experience in Japan. On the other hand, regarding the latter, Vietnamese companies are expected to expand their business activities in Japan, backed by the increase in the number of Vietnamese, living in Japan.

An increasing number of Japanese firms have been moving or plan to move production from China to its neighbouring countries, including Viet Nam. What do you think about the trend and what should Viet Nam do to allure those firms?

It is true that some companies in China have moved production bases from China to neighbouring countries due to the US-China trade disputes or COVID-19. This trend has been seen as “China plus 1” for more than 10 years, that is due to the increase in labour costs and other costs in China. I think there are some cases, which the US-China trade disputes and/or COVID-19 supported the movement of “China plus 1”.

Viet Nam is very popular investment destination for Japanese companies. I imagine that the movement of “China plus 1” will continue to be seen, but, [depending on early containment of COVID-19 and resumption of economic activities] China remains a generally attractive destination for many Japanese companies.

In order to attract foreign companies including Japanese companies, it is important for Viet Nam to continue to improve the investment environment and develop human resources. In addition, in order to improve the industrial structure of Viet Nam, it seems necessary to work on attracting foreign companies that include technology- and knowledge-intensive industries in and around urban areas such as Ha Noi, HCM City and Hai Phong, and labour-intensive industries in rural areas.

To that end, it is important that the provinces and cities of Viet Nam compete with each other to enhance their attractiveness as an investment destination, including the careful consideration of the companies that have entered the market. — VNS

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