By the end of 2019, Japan External Trade Organization – JETRO published a survey asking 3.500 Japanese enterprises who showed interest in extending their overseas business operation. As a result, around 41% of enterprises that participated in the survey are now considering Vietnam to be their potential investment location within the next three years, growing 5.5 points percentage compared to last year.
The report also shows that due to the confrontation between the United States and China, Japanese enterprises have moved their businesses to South East Asia. The gap between investment capital from Japan to other South East Asia countries and from Japan to China has been growing from 10 billion Yen in 2017 to 20.4 billion Yen in 2019.
However, COVID-19 pandemic also took many effects on the investment activities of Japanese companies in South East Asia. Accordingly, Japan is executing a diversification project of ASEAN supply chain to avoid the concentration of production activities in one particular country. Particularly, the production activities of some Japanese enterprises which currently occur in China will now move partly to ASEAN countries to avoid the breakdown of the supply chain due to the unpredictable impact of COVID-19 pandemic.
Currently, the Japanese Government will provide support for a few chosen enterprises that extend their business to ASEAN countries, including Vietnam. In the initial stage, 15 Japanese enterprises that are extending their business operation in Vietnam will be supported and provided with investment incentives.