The Tan Tao Industrial Park in HCM City. HCM City authorities plan to address business competitiveness and productivity at meetings with investors to respond to the sharp drop in foreign direct investment (FDI) this year. — Photo hepza.hochiminhcity.gov.vn

HCM CITY (Biz Hub) — HCM City authorities plan to address business competitiveness and productivity at meetings with investors to respond to the sharp drop in foreign direct investment (FDI) this year.

From January to mid-May, FDI dropped 38 per cent year-on-year in the city, according to the Ministry of Planning and Investment's Foreign Investment Department.

Tran Viet Ha, head of the Investment Department of the HCM City Export Processing and Industrial Zones Authority (Hepza), said the drop had occurred mostly because of the lack of new big projects in the garment and textile sector.

The number of FDI projects invested in the Sai Gon Hi-Tech Park (SHTP) during the period was modest, with only two projects given investment certificates, worth a total $22.34 million.

However, Le Hoai Quoc, head of SGTP's Management Board, said that many large FDI projects were expected to be granted certificates in the near future.

SHTP, for example, has recently negotiated with potential investors from the US, Japan and South Korea.

Le Thi Huynh Mai, deputy director of the city's Department of Planning and Investment, said HCM City was expanding the second phase of SHTP by an additional 600 hectares and plans to expand Quang Trung Software Park with a goal of creating a software park alliance.

As of mid-May, the city had a total FDI of US$674.3 million since January, a drop of $375.7 million over the same period last year.

A majority of the projects granted investment certificates during the period were in the sectors of real estate, finance and telecommunications.

Meanwhile, the country's total FDI investment reached $10.15 billion, a surge of 136.4 per cent over the corresponding period last year, according to the Foreign Investment Agency of the Ministry of Planning and Investment.

FDI opportunities nationwide are expected to increase as a result of new free trade agreements, especially the Trans-Pacific Partnership (TPP), but the country needs to improve the quality of human resources, especially foreign-language skills, according to Quoc.

To create favourable conditions for investors, HCM City continues to allocate more cleared land for production and upgrade infrastructure at industrial parks and export processing zones.

Tran Vinh Tuyen, the vice chairman of the city's People's Committee, meeting with the State Bank's HCM City branch, said the city's Party Secretary Dinh La Thang would organise a dialogue next month to identify measures that could help enterprises and investors overcome problems. — VNS