How can authorities ‘filter’ FDI projects that use outdated technology?
VietNamNet Bridge - At a press conference about the socio-economic situation in Dong Nai province in 2018, Mai Van Nhon, from the Industrial Zone Management Board, said the province will be choosier when licensing FDI projects and will refuse outdated technologies.


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Hi--tech projects will be given priority



Nhon said that hi-tech environmentally-friendly projects will be given priority. FDI investment) foreign direct projects will have to satisfy requirements in production fields, technological content, number of workers, and productivity.

Dong Nai is not alone. Da Nang City rejected an FDI project in the textile & garment industry because of concern about pollution, though the project had huge registered capital of $200 million.

Meanwhile, Dong Nai and Ba Ria-Vung Tau provinces have included textile and dyeing on the list of business fields in which they will not encourage investment.

Dinh Trong Thinh from the Finance Academy noted that provincial authorities began to be more selective about FDI projects in 2016, and this trend became clearer in 2017 and 2018.

Da Nang City rejected an FDI project in the textile & garment industry because of concern about pollution, though the project had huge registered capital of $200 million. Dong Nai and Ba Ria-Vung Tau provinces have included textile and dyeing on the list of business fields in which they will not encourage investment.

Vinh Phuc said no to TAL’s textile & dyeing project capitalized at $350 million, while Hai Phong City refused a footwear project with investment capital of $800 million.

Some localities have accepted FDI projects from Japan and Israel to develop hi-tech agriculture, though the projects have modest capital. The $4.14 billion smart-city project of Sumitomo Corporation shows Vietnam has become more selective in attracting FDI.

The Ministry of Planning and Investment (MPI) recently urged improvement of examinations of imported equipment used at FDI projects. However, the ministry admitted it was not an easy task because of limited resources and staff. Using specific mechanisms to inspect technologies and equipment prices may create discrimination, which is not in line with international treaties.

Thinh agrees that this is a technological issue. Inspection agencies need to have experts with deep knowledge about technologies in many different fields to undertake the job. 

Vietnam also doesn’t have a data bank which inspectors can refer to when considering imported technologies.

However, he believes the issues can be resolved. Thinh said the biggest concern is the fear that local authorities have that they may lose FDI. “The number of registered FDI projects and committed foreign investment capital are used to measure economic development. So, local authorities try to lure FDI at any cost,” he explained.

In related news, a PricewaterhouseCoopers’ report showed that Vietnam has, for the second consecutive time, surpassed China as the economy with the greatest potential in FDI attraction. 


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Mai Lan

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