Hanoi (VNS/VNA) - Vietnam needed to redefine itscompetitive advantages in the new period to be ready to receive foreign directinvestment flows from the United Kingdom (UK), experts have said.

Despite cheap labour costs and abundant personnel resources, Vietnamshould rely on new factors including an attractive and transparent investmentenvironment, simplified and digitalised administrative procedures, andinfrastructure development, they said.

In addition, the UK is a country with a developed high-techindustry, so to effectively attract FDI from the UK, Vietnam should establishan ecosystem that could effectively support domestic suppliers with sufficientmanagement capacities so that they could meet the needs of tier 1 and tier 2suppliers of British foreign-invested enterprises in Vietnam.

According to experts, the UK's investment in Vietnam will likelyincrease thanks to many favourable factors. These include close relationshipsin multiple areas such as education, science and technology, industry, andenergy as well as the UK's applause for Vietnam's commitment to achievingnet-zero energy emissions by 2025. The UK then vows to provide Vietnam withtechnical support, expertise as well as establish partnerships and energytransition and climate change programmes for Vietnam.

As of August 20, 2023, the UK had 542 direct investment projectsin Vietnam with registered capital of about 4.29 billion USD, ranking 15th outof 143 countries and territories investing directly in Vietnam.

The processing and manufacturing industry lured the lion's shareof UK investment with 117 projects worth 1.59 billion USD, accounting for 38.1%of the total investment capital.

The property sector came next with seven projects, valued at 701.44million USD or 16.7% of the total. It was followed by the mining sector,wholesale and retail, car and motorbike repair, accommodation and foodservices, water supply and waste treatment, science and technology, andeducation.

UK investors poured their investments into 36 localities and offshoreareas in Vietnam. Of which, Ho Chi Minh City took the lead with 244 projectswith capital totalling over 909 million USD or equivalent to 21.6% of the totalUK investment in Vietnam. Offshore areas came next with five projectscapitalised at 688 million USD and Dong Nai province with 11 projects valued at670.8 million USD. Others were Hai Duong, Long An and Binh Duong provinces.

Over the past eight months of 2023, the UK had a total of 34 newinvestment projects in Vietnam with registered capital reaching 48.3 millionUSD. Among European countries, the UK is now the second-largest foreigninvestor in Vietnam, just after the Netherlands.

According to Deputy Minister of Industry and Trade Nguyen Sinh NhatTan, the UK-Vietnam Free Trade Agreement (UKVFTA), taking effect since May2021, and the Comprehensive and Progressive Agreement for Trans-PacificPartnership (CPTPP), which the UK joined on July 16, 2023, would be strongdrivers to further develop bilateral relations, especially in investment in thefuture./.