Thailand foreign direct investment to vietnam in the recent years

Nội dung text: Thailand foreign direct investment to vietnam in the recent years

1. THAILAND FOREIGN DIRECT INVESTMENT TO VIETNAM IN THE RECENT YEARS MSc. Le Minh Tuan1 Abstract: Thailand was one of the first countries to establish an investment cooperation agreement with Vietnam, shortly after Vietnam announced an open-door policy to attract foreign investment. Thai investors have invested in 567 projects to date, with total newly and extra investment money totaling more than 12 billion USD, placing them ninth out of 136 nations and territories investing in Vietnam. Thai projects concentrate on major economic areas such as the manufacturing /processing industry, real estate, and mergers and acquisitions in the retail and consumer sectors. This article will discuss some of the major aspects of Thailand’s recent FDI into Vietnam. Keyword: Foreign direct investment, FDI, Thailand, Vietnam INTRODUCTION Vietnam-Thailand strategic collaboration has grown significantly and extensively in recent years, particularly in economic-trade-investment cooperation. Vietnam is Thailand’s second largest commercial partner, and Thailand is Vietnam’s largest ASEAN trading partner. Thailand is presently the ninth largest investor in Vietnam, out of 136 nations and territories, with 567 projects and a total investment capital of over 12 billion USD in Vietnam for investment operations and capital purchase. The article examines the issue of luring Thai direct investment to Vietnam in light of Vietnam’s rising demand for investment capital, as well as Vietnam’s status as a favored destination for many Thai investors in recent years. As a result, the article suggests a number of concrete actions for the government and Vietnamese businesses to take advantage of possibilities to enhance Thailand’s foreign direct investment appeal in the near future. 1. THAILAND FOREIGN DIRECT INVESTMENT TO CLMV COUNTRIES As an international investor, Thailand is gaining in prominence. Between 2008 and 2018, outward foreign direct investment (OFDI) stock has increased twelve-fold, with the majority of that growth occurring between 2010 and 2019. Thailand’s OFDI stock has exceeded USD 100 billion in 2017, placing it 14th among emerging countries. Following the Asian Financial Crisis in 1997, outbound investment by Thai businesses picked up speed again and continues to grow. As the liberalization of capital outflows took place during the latter half of the 2010s, flows of USD 11 billion left the country in 2013. As Thailand suffered declining economic development and political instability in 2013-15, both foreign direct investment (FDI) inflows and outflows fell. However, in the subsequent period, outflows have rebounded and increased consistently. The outward foreign direct investment is an increasingly important compared to inbound FDI and this suggests that Thailand is strengthening its position as a regional 1 VNU University of Economic and Business; Email:tuanlm@vnu.edu.vn 637
2. 638 KỶ YẾU HỘI THẢO KHOA HỌC QUỐC TẾ FDI TOÀN CẦU VÀ ỨNG BIẾN CỦA DOANH NGHIỆP FDI TẠI VIỆT NAM TRONG BỐI CẢNH MỚI outward investor. FDI outflows surpassed inflows by 70% between 2010 and 2018 (OECD investment policy review, 2021). While the economy has seen dramatic growth over the last several years, the outward foreign direct investment of Thailand is also anticipated to decrease because to the developing worldwide economic crisis caused by the COVID-19 pandemic. Even under the most optimistic scenario, global FDI flows are projected to decline by more than 30% in 2020. Thailand is ASEAN’s third largest external investor in terms of GDP. Thai outward foreign direct investment outpaced Malaysian outflows in 2016. It is currently the second biggest external investor in Southeast Asia, behind only Singapore. Thailand’s OFDI stock as a percentage of GDP increased from around 5 percent to almost 25 percent over the period 2008-18, outpacing the ASEAN average, excluding Singapore (OECD, 2020). Thailand’s outward foreign direct investment (OFDI) is concentrated in a limited number of nations. More than a third of Thai new investments are in ASEAN countries and particularly in Cambodia, Laos, Myanmar, and Vietnam (CLMV countries). Indonesia and the Philippines also get investments, although their proportion has decreased in recent years as CLMV’s stake has increased. Thai new projects in CLMV nations are often lower in scale than those in other countries in the region. Thai investors relocate low-value-added industries that are no longer competitive in Thailand to neighboring CLMV nations, and Thailand has grown to become one of the largest foreign investors in CLMV. In 2018, it was the third and fourth biggest investor in the Lao People’s Democratic Republic and Myanmar respectively. Geographic closeness and cultural affinity are two of the primary reasons cited by Thai manufacturing companies for establishing production facilities in CLMV. Apart from ASEAN, Asia accounts for over 90% of new investment, especially in China, Australia, and Japan (Asean Investment report, 2018). Thailand’s outward foreign direct investment worth in CLMV has continued to grow from 2012 to 2019. Thailand OFDI in CLMV rose to $7,651.27 million, up from $3,048.90 million in Vietnam, $1,930.22 million in Laos, $1,370.06 million in Cambodia, and $1,302.09 million in Myanmar. The CLMV countries are attracted by their high economic growth rate, high proportion of working-age workers (more than 60%), low labor costs in comparison to other ASEAN countries, abundance of commercially exploited natural resources such as forests, oil, natural gas, minerals, and water sources that can generate electricity, and political stability, which results in clear and continuous economic development (Sujinda Chemsripong, 2021). Figure 1: Number of Thai listed firms undertaking OFDI classified by regions Source: SET Thailand (2020)
3. INTERNATIONAL CONFERENCE PROCEEDINGS: GLOBAL FDI AND RESPONSES OF FDI ENTERPRISES IN VIETNAM IN THE NEW CONTEXT 639 Cross-border mergers and acquisitions activity in Thailand is less concentrated in CLMV than greenfield investments. Since 2011, Singapore, along with Viet Nam, has seen a significant rise in its proportion of overall mergers and acquisitions activity in the region. A small number of major purchases in both nations were the driving force behind these changes. During the 2000s, Thai investors mostly bought shares in Indonesia, the Philippines, and Malaysia, although the size of new mergers and acquisitions in these countries has been modest in recent years. Figure 2: Thailand outward mergers and acquisitions investment (% of ASEAN) Source: OECD and UNIDO (2019) Investment types influence the sectoral mix of Thailand outflow foreign direct investment. Greenfield projects are most often seen in the infrastructure and industrial sectors. The industries involved in mergers and acquisitions vary from manufacturing (mostly food and beverage) and mining to financial sector. Thailand businesses are engaged in some of Southeast Asia’s biggest energy infrastructure projects, especially in CLMV. In addition, Thailand’s firms have announced intentions to construct gas-fired power plants as well as hydroelectric facilities in Myanmar, wind power in Laos. It is expected to significantly increase the country’s electricity capacity as well as its potential for electricity exports to neighboring countries Cambodia, Thailand, and Viet Nam. Over the last several years, Thai external investments in solar and wind energy have also increased significantly. Figure 3: Thai greenfield investments are concentrated in infrastructure projects, while the majority of M&A deals are in manufacturing, mining and finance Source: OECD and UNIDO (2019)
4. 640 KỶ YẾU HỘI THẢO KHOA HỌC QUỐC TẾ FDI TOÀN CẦU VÀ ỨNG BIẾN CỦA DOANH NGHIỆP FDI TẠI VIỆT NAM TRONG BỐI CẢNH MỚI 2. THAILAND’S FDI IN VIETNAM Thailand and Vietnam are two countries that are geographically adjacent. Since the establishment of diplomatic ties in 1976, the two sides have continued to achieve progress on all fronts. Additionally, robust economic cooperation is a critical pillar of Thailand-Vietnam ties. Thailand began investing in Vietnam in the 1980s and expanded its involvement significantly in the 1990s. Due to Thailand’s economic problems, recent investment in Vietnam has been sluggish. Thailand’s investment in Vietnam was renewed in the late 2000s, and the country was ranked as one of the top ten foreign investors in the country. There is no policy in place specifically for external FDI in Thailand. However, the Thai government has been assisting the nation’s businesses in overseas ventures since the early 1990s by implementing different policies and facilities for assistance. Since 1 January 2006, it had signed almost 100 of both double taxation treaties and bilateral investment treaties as well as various regional arrangements (ASEAN Free Trade Area, ASEAN Investment Area, ASEAN Framework Agreement on Services) and bilateral free trade agreements (FTAs) with investment provisions (OECD-UNIDO, 2019). The scale of investment Thailand began investing in Vietnam in 1992, and continued to do so until 1993. However, between 1992 and 1993, Thailand’s FDI into Vietnam was very limited, totaling just seven projects with a total investment capital of 52.77 million US dollars. Vietnam joined ASEAN in 1995, marking a watershed moment in the country’s path of international economic integration and the Association’s growth. There was a breakthrough in FDI projects from ASEAN nations in general, and from Thailand in particular. During this time, belong 125 investment projects in Vietnam from ASEAN nations worth about 6.2 billion USD in three years, Thailand have had 30 investment projects worth approximately 579.9 million USD. In 1997, the financial crisis started in Thailand and spread to a number of other nations in the area, having a significant effect on the situation regarding recruiting FDI from ASEAN countries in general and Thailand to Vietnam in particular. The consequence of FDI attraction was a rapid decline. Between 1997 and 2005, Vietnam received just 72 FDI projects from Thailand, totaling 426.97 million USD in registered foreign capital. In 1997, there were only nine investment projects in Vietnam with a total investment capital of 39.7 million USD, a decrease of more than half from the same period in 1996. From 2001 to 2005, the situation with regard to attracting FDI from Thailand improved slightly but remained extremely low in comparison to the previous period (Foreign investment agency, MoPF, 2016). From 2006 and 2008, this is the peak era for foreign direct investment in Vietnam. Thailand’s FDI into Vietnam also grew significantly during this time. Between 2006 and 2008, ASEAN nations spent a total of 23.3 billion USD in Vietnam, with Thailand alone investing almost 5 billion USD, the largest amount ever. During this period, projects primarily focused on manufacturing (48 projects with a total registered capital of 4.81 billion USD) accounted for 98.5 percent of Thailand’s total registered capital. Additionally, there are other investment projects in constructions, water supply, transportation, and warehousing sectors From 2009 until the 2016, following the peak period of FDI in 2007-2008, the global economic crisis precipitated by the US financial crisis impacted both the global economy
5. INTERNATIONAL CONFERENCE PROCEEDINGS: GLOBAL FDI AND RESPONSES OF FDI ENTERPRISES IN VIETNAM IN THE NEW CONTEXT 641 and the condition for recruiting FDI in Vietnam. Thailand’s investment in Vietnam dropped significantly in 2009, with 26 projects totaling about 90 million USD. In 2010, the situation improved with 26 projects and a total investment capital of 326 million USD. Since 2013, with many initiatives aimed at improving the overall investment climate for the whole nation, the situation for attracting FDI has improved. The year 2013 was a banner year for attracting FDI from Thailand, with 47 projects totaling 597 million USD in venture capital. Although not on a par with the 2007-2008 peak era, the results of attracting FDI remain reasonably steady, with many investment projects in the processing and manufacturing sectors (Foreign investment agency, MoPF, 2016). Between 2016 and 2019, the entire import-export turnover between Vietnam and Thailand accounted for about 30% of Vietnam’s total import-export turnover with all ASEAN nations. The value of two-way commerce increased to US$17.2 billion in 2018, US$17.5 billion in 2019, and US$13.5 billion in the first ten months of 2020. Until now, Thailand is presently the ninth largest investor in Vietnam, out of 136 nations and territories, with 567 projects and a total investment capital of over 12 billion USD in Vietnam for investment operations and capital purchase. Thai Investors in the first four months of 2021 maintains a 163 million USD investment in Vietnam. Table 1: Thailand FDI in Vietnam (Unit: project/millions USD) 1993 1996 2005 2008 2017 2020 Accumulated Project 7 37 109 157 458 567 Accumulated capital 52.77 632.9 1,059.9 6,000 8,130 12,650 Source: Ministry of Planning and Finance, 2021 Thailand investment by industry Thailand’s investors are expanding their investment, merger and acquisition operations in Vietnam as a result of the Covid-19 pandemic. In 2020, Thailand had 40 newly registered projects, 23 registered capital adjustment projects, and 100 times of capital contribution to buy shares in Vietnam, according to data from the Ministry of Planning and Investment. The total registered capital in Thailand were nearly 1.8 billion USD in 2020, the ministry reports. This figure has more than doubled when compared to the previous year and is almost seven times greater when compared to the timeframe 2015-2020. The reason for this heightened interest in investing in Vietnam is because the country is on the same development path as Thailand was a few decades ago, with fast economic growth and a rapidly expanding middle class. Viet Nam has a highly developed local consumer market, a desirable geographic position, cheap production costs, and is thus ideally suited for expanding industrial production and exporting products to the whole ASEAN area, among other advantages. In addition, trade agreements with other important market regions have been signed or are in the process of being signed by Vietnam. Rather of investing in small companies or projects in Vietnam, Thai corporations seek for big Vietnamese enterprises that are prepared to pay significant sums to acquire Vietnamese businesses or projects that they believe have potential for growth. Generally speaking, Thai companies concentrate their efforts on investing in Vietnam on the following areas:
6. 642 KỶ YẾU HỘI THẢO KHOA HỌC QUỐC TẾ FDI TOÀN CẦU VÀ ỨNG BIẾN CỦA DOANH NGHIỆP FDI TẠI VIỆT NAM TRONG BỐI CẢNH MỚI - Agribusiness, forestry, and fisheries - Processing and manufacturing businesses. - Commercial real estate enterprise activities - Retail and consumer sectors - Food and beverage industry - Renewable energy sources. - Construction - Information and communication technology - Industrial Park infrastructure - Petrochemical Thailand has never been among the top five biggest investors in terms of investment size, having amassed a total of less than 13 billion US dollars. When compared to the investment capital of more than 70 billion USD from Korean investors or the investment capital of 60 billion USD from Japanese investors, this number seems to be small. Due to the fact that investment is concentrated in each sector, Thai individuals are constantly aware of how to make their imprint and capture the majority of the market share. Since 2015, some particular sectors in which Thai companies have concentrated their efforts on investing in Vietnam are as follows: Food and beverage retailing, as well as food manufacturing: Central Group and TCC Group are the two most well-known brands in the industry, since they own the two biggest supermarket chains in the country. Central Group is a business conglomerate that has acquired a number of companies in the last two years. In 2015, Central Group acquired a 49 percent stake in the owner of the Nguyen Kim electronics store chain via its subsidiary Power Buy. This was the same year that the Thai company bought the Lan Chi grocery chain, a retail entity that specialized in the underserved market of Northern Vietnam’s rural areas. In 2016, Central Group completed the acquisition of the BigC Vietnam chain from Casino Group (France) for a total transaction value of more than 1 billion dollars. TCC Group also bought the wholesale chain Metro Cash & Carry Vietnam (now called MM Mega Market) for $655 million in early 2016, bringing its total acquisition value to $700 million. ThaiBev invested $5 billion USD at the end of 2017 to purchase a 53.59 percent interest in Saigon Beer - Alcohol - Beverage Corporation (Sabeco), thus indirectly owning more than 1/3 of Vietnam’s beer industry. Sector of energy: The energy industry, particularly solar energy, is a new growing area that has attracted the attention of Thai companies. And, like in the previous sectors, the most effective method to increase market share is via mergers and acquisitions (M&A). Super Energy Corporation, a Thai business, made a three-year investment in the form of stock in a series of solar power projects in Ninh Thuan, An Giang province, in order to increase its energy production. This company stated at the end of March 2020 that the Securities Commission of Thailand (SET) has approved the expenditure of more than 456 million USD to invest in the purchase of shares in four solar power plant projects in Binh Phuoc. Located in Tay Ninh, the TTC 1 and TTC 2 solar power facilities were co-invested and managed by Thanh Thanh Cong
7. INTERNATIONAL CONFERENCE PROCEEDINGS: GLOBAL FDI AND RESPONSES OF FDI ENTERPRISES IN VIETNAM IN THE NEW CONTEXT 643 Group and Gulf Energy Group (Thailand). The plants have been in operation since mid-2019. When Gulf acquired a 49 percent stake in the company, the Thai group had a 49 percent stake; however, since then, Gulf has grown its stake to 90 percent. The WHA Utilities and Power (WHAUP) has also invested in Duong River Surface Water Joint Stock Company, which is one of the major water supply businesses in Hanoi Capital, and has bought 47.3 percent of the shares in Cua Lo Water Supply Joint Stock Company in Nghe An. The location of investment Thai investment in Vietnam has increased in both quantity and diversification during the last several years, shifting from one sector to another and from one place to another. Several provinces, including as Hanoi, Thanh Hoa, Nghe An, Thua Thien-Hue, Binh Duong, Binh Phuoc, Ho Chi Minh city, Bien Hoa, Ba Ria-Vung Tau, and others, now have Thai companies operating in them. Thai investors are often closer to Vietnam in terms of geography and culture than European or American investors, therefore they do not encounter as many obstacles while investing in Vietnam as European or American investors. In contrast, because Thailand’s economic development level is not significantly higher than Vietnam’s, there are certain limitations to the financial capacity of investors, and as a result, in general, only 48 percent of the registered capital of Thai projects has been invested, despite the fact that the average investment size is not large (Foreign investment agency, MoPF, 2016). . The ownership pattern of investment The majority of Thai companies who engage directly in Vietnam do so via joint ventures, 100 percent foreign capital, and mergers and acquisitions. When it comes to investing in Vietnam, joint ventures are a popular choice for Thai companies since they have just recently entered the Vietnamese market and need a partner to help them establish relationships with customers and suppliers in both countries. access to the market while at the same time sharing duties and liabilities is essential. Thai investors discovered that this kind of joint venture was very successful after many years of implementing manufacturing and commercial operations in Vietnam, resulting in a high level of turnover and export, as well as high-value products As a result, Thai investors are increasingly turning to this type for assistance. Cooperative ventures between Vietnamese and Thai businesses are most often found in projects involving the processing of agricultural and forestry products, light industries, and services. Besides investing in joint ventures, Thai investors are becoming more interested in investing in projects with 100 percent foreign investment. This is due to the fact that this is a kind of investor that has the right to be self-sufficient and make decisions about company strategy on their own. Apart from that, in order to attract foreign direct investment, the Vietnamese government has increased the investment period for this kind of investment from 20 years to 50 years, while also allowing investors to take use of certain advantages such as joint venture firms. Thus, investment projects using 100 percent Thai money have seen a rise in their number of completed transactions. In addition, Thai companies continue to expand their investment in Vietnam via mergers and acquisitions and other means (M&A). Due to an uncertain political environment, a
8. 644 KỶ YẾU HỘI THẢO KHOA HỌC QUỐC TẾ FDI TOÀN CẦU VÀ ỨNG BIẾN CỦA DOANH NGHIỆP FDI TẠI VIỆT NAM TRONG BỐI CẢNH MỚI sluggish economy, and a strong baht, Thai companies are more motivated to encourage foreign investment via mergers and acquisitions (M&A) transactions. Overall, between 2010 and 2019, Thai companies have been at the forefront of the mergers and acquisitions wave in Southeast Asia, accounting for 38 percent of the overall value of M&A transactions, placing them ahead of Singapore and Malaysia. Since 2015, Thai companies have undertaken a series of major mergers and acquisitions in Vietnam, including Central Group’s purchase of Big C Vietnam, Singha’s investment in Masan Consumer, Masan Brewery, and TCC Holding purchase Metro. Despite Covid-19’s effect, Thai companies expanded their investment in Vietnam through share acquisitions. For example, Stark Corporation (Thailand) announced the successful acquisition of 100% of the shares in Thinh Phat Electric Cable Joint Stock Company (Thipha Cables) and Vietnam Nonferrous Metals and Plastics Joint Stock Company (Dovina), a company established by Thinh Phat’s shareholders, for $240 million; solar energy projects in Binh Thuan and Phu Yen have also been officially acquired. 3. FACTORS INFLUENCING THAILAND’S FOREIGN DIRECT INVESTMENT IN VIETNAM Thai companies are expanding their presence in the Vietnamese market, according to a spokesman of the Thai Business Association in Vietnam. Thai investors are particularly interested in Vietnam’s retail and consumer goods sectors, as well as in urban real estate - resorts, renewable energy, pharmaceuticals, and telecommunications. The reason for this financial interest is that Thai companies see not just the potential of Vietnam’s over 90 million-person market, but also characteristics such as growth rate, youthful population, and consumer trends. Domestic consumer growth and a significant market capacity in the majority of sectors, along with sociocultural similarities between the two nations, provide favorable circumstances for Thai investors to select Vietnam. Geographical factors Thailand’s foreign direct investment (FDI) flows easily into Vietnam since both countries are close to markets such as China and ASEAN. The quality of infrastructure in major cities like as Hanoi and Ho Chi Minh City has significantly increased in recent years. The skylines of Vietnam’s main cities are being transformed, while highways and ports are being renovated or constructed across the nation. The state of the telecommunications infrastructure is improving, and costs are decreasing. Second-tier amenities important to expatriates, such as excellent restaurants, well-stocked supermarkets, and foreign schools are usually accessible in major cities. On the other hand, some foreign direct investment comes to nations with natural resources, particularly oil and minerals. The existence of natural resources does not imply that foreign investors will be interested or welcomed in a certain location or region. Lastly, youthful population with 95 percent of the country’s population is under the age of 65. These consumers are eager to learn more about western consumer products, and they represent a large potential market for international investment (Pittaya Suvakunta, 2016). Political factors Foreign investors have long been drawn to Vietnam’s political stability. This Vietnam factor continues to be highly valued by FDI companies, with a rate of above 90%. Following significant gains in recent years, Vietnam now faces a reduced danger of corporate ground retreat and a lower chance of policy instability.
9. INTERNATIONAL CONFERENCE PROCEEDINGS: GLOBAL FDI AND RESPONSES OF FDI ENTERPRISES IN VIETNAM IN THE NEW CONTEXT 645 The proportion of FDI companies in Vietnam that believe the danger of land expropriation is minimal has risen from 64% to 80%. Additionally, the proportion of FDI companies that believe Vietnam has a reduced risk of policy instability rose from 60% in 2013 to 82% in 2020. Along with almost 10,700 private businesses, the PCI 2020 study questioned 1,600 foreign-invested enterprises (FDI). The PCI 2020 poll findings indicate that FDI companies continue to see Vietnam as an attractive investment location with steady political benefits, with administrative processes, inspection, and unofficial expenses progressively becoming more transparent. This demonstrates the effectiveness of Vietnam’s economic growth plan, which is predicated on attracting foreign direct investment and growing the local private sector (Newspaper of the government, 2021). Economic factors Thailand and Vietnam agreed to double their bilateral trade to US$20,000 million by 2020. Trade barriers would be removed. It is intended to encourage the use of the Baht and Dong in financial transactions. An informal system for the protection and promotion of investment would be created, and commercial banks would build branches in both nations. Additionally, low salaries attract Thai companies. At times, it is claimed, foreign investors seek low-wage areas. This is somewhat accurate, since the majority of FDI is still carried out by companies from developed nations. 4. SEVERAL IMPLICATIONS TO PROMOTE THE ATTRACTION OF THAILAND’S INVESTMENT TO VIETNAM Vietnam and Thailand established diplomatic ties relatively early on, immediately after Vietnam’s independence and subsequent reunification. The two nations’ governments have prioritized and encouraged development and investment cooperation, signing the Agreement on Investment Promotion and Protection (February 7, 1992) and the Agreement on Avoiding Double Taxation establishing a legal foundation for collaboration. Economic, commercial, and investment cooperation are becoming more successful. Bilateral trade volume grew steadily and significantly. Thailand has always been a significant investor in Vietnam. Vietnam and Thailand have an excellent working relationship in regional and international fora, particularly within the ASEAN framework. Both parties have shown their commitment to ASEAN and, together with other members, are committed to successfully execute the ASEAN Community’s expansion. FDI from Thailand has made important contributions to Vietnam’s economic growth and development in recent years, along with other nations. As a result, the Vietnamese government has always placed a premium on the role of Thai investors. To continue to attract Thai direct investment capital successfully, Vietnam must undertake a number of particular initiatives, including the following: To begin, continue to enhance Vietnam’s economic ties with Thailand. Vietnam needs to develop and deepen its connection with Thailand based on the positive relationship that has existed so far. Additionally, it is essential to bolster high-level meetings between the two sides’ leaders in order to fortify long-term connections and expand new investment possibilities. Simultaneously, increasing the number of seminars and exhibitions dedicated to introducing Vietnamese businesses to Thailand, or vice versa, introducing Thai businesses
10. 646 KỶ YẾU HỘI THẢO KHOA HỌC QUỐC TẾ FDI TOÀN CẦU VÀ ỨNG BIẾN CỦA DOANH NGHIỆP FDI TẠI VIỆT NAM TRONG BỐI CẢNH MỚI to Vietnam, or exchanging information between the two countries is another way to assist in the development of Vietnamese enterprises in Thailand. Increase mutual understanding, laying the groundwork for future investment partnerships. This is a critical criterion, since many big Thai investors have shown little interest in the Vietnamese market, in part owing to a lack of understanding between companies on both sides. Additionally, many sociocultural exchanges, tourist promotion activities, and cultural events may be organized in Vietnam and Thailand to assist the two countries better understand one another’s traditions and practices. This is also a kind of indirect promotion for our country’s investment opportunities. Second, undertake investment mobilization in Thailand in a novel manner, focusing on important projects to attract investment from particular Thai companies. Organize two- country business delegations to explore and learn about mutual investment possibilities. Third, promote and assist significant Thai projects that are presently being negotiated or planned by promoting favorable circumstances for projects to rapidly deploy after receipt of investment certificates. Resolve issues effectively for Thai companies operating in Vietnam in order to increase Thai investors’ trust. Fourth, research and development of supporting industries, as well as the production of raw materials for industry, establish a link between FDI businesses in general and Thai FDI enterprises in particular, as well as domestic enterprises. Fifth, Vietnam solicits Thai investment in areas where Thailand excels, such as agricultural development or infrastructure development; Vietnam proposes an investment cooperation program as well as a separate investment incentive mechanism between Vietnam and Thailand to further promote Thai investment in Vietnam. CONCLUSION Thailand is a significant investor in Vietnam at the moment. Vietnam encourages Thai companies to expand their investment collaboration in Vietnam, particularly in sectors where Thailand excels. Thai companies are investing in Vietnam’s infrastructure, construction materials, consumer goods, food, and automobile sectors. There are many advantages for Thai investors to pick Vietnam; apart from the fact that Vietnam is a big market with growing consumer demand, it is also a market for them to expand in the area. As can be seen, infrastructure is one of Thailand’s assets. In recent years, a number of Thai projects, such as Amata Vietnam, have invested in the development of industrial infrastructure in Vietnam. Amata, a Thai industrial infrastructure developer, is evaluating possibilities to invest billions of dollars in two more industrial urban complex projects in Vietnam. Receiving Thai investment in this sector is critical for the development of Vietnam’s infrastructure. Additionally, Thai investors with enough money often acquire local companies as a stepping stone to growth. Vietnam is undoubtedly a preferred location for a large number of Thai investors, as shown by a succession of billion-dollar investment projects and mergers and acquisitions in the retail and consumer sectors. With many large-scale projects ongoing, Thai investment in Vietnam is anticipated to surge in the coming years. We cannot dispute the importance of Thai FDI in the economic growth and development of Vietnam in the past. According to forecasts, FDI capital from Thailand has been increasing
11. INTERNATIONAL CONFERENCE PROCEEDINGS: GLOBAL FDI AND RESPONSES OF FDI ENTERPRISES IN VIETNAM IN THE NEW CONTEXT 647 fast and will continue to do so in the future years as Vietnam continues to integrate more and deeper. Thus, in the new global and regional economic environment, in order to keep up with the flow of direct investment capital from Thailand, which is shifting from a number of countries in the region, the government, localities, industries, and Vietnamese enterprises must not only improve the general institutional environment, but also clearly define a key investment objective for each industry and locality. Simultaneously, new development standards are required to guarantee Vietnam’s economic and social advantages. REFERENCES 1. ASEAN Secretariat and the United Nations Conference on Trade and Development (UNCTAD), 2018, ASEAN Investment Report: Foreign Direct Investment and the Digital Economy in ASEAN 2. Foreign investment agency, 2016, Evaluation of 25 investment cooperation relations of Vietnam - Thailand and vision in the future, NewsID/b08d71c1-cd9a-42dc-9ee5-52788818cb9e/MenuID/50557cad-3121-46e2-8449-37bfb0a04483, last accessed at 04/07/2021 3. Kee Hwee Wee, 2007, “Outward foreign direct investment by enterprises from Thailand”, Transnational Corporations 4. Newspaper of the government, 2021, Vietnam is an attractive investment destination for FDI, http:// baochinhphu.vn/Kinh-te/Viet-Nam-la-diem-den-dau-tu-hap-dan-cua-dong-von-FDI/428643.vgpm, last accessed 04/07/2021 5. OECD-UNIDO (2019), Integrating Southeast Asian SMEs in Global Value Chains: Enabling Linkages with Foreign Investors, Paris, OECD 6. OECD, 2021, Investment policy review: Thailand, OECD 7. Pittaya Suvakunta, 2016, Thailand’s Foreign Direct Investment (FDI) in Vietnam, Thammasat University, Thailand 8. Sujinda Chemsripong, 2021, Thailand Foreign Direct Investment to CLMV Countries: Macro Economics Approach, Faculty of Business Economics and communication, NARESUAN UNIVERSITY, THAILAND.