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More than 40% of the 3,500 Japanese businesses surveyed by Jetro are considering expanding operations in Vietnam over the next three years.

The Japan Trade Promotion Organization (Jetro) has just announced the results of a survey conducted at the end of last year, based on the feedback of 3,500 Japanese enterprises interested in doing business overseas.

The results show that, 41% of these, or about 1,400 Japanese enterprises are considering expanding operations in Vietnam in the next three years, up 5.5 percentage points from the previous year.

Meanwhile, more than 36% of businesses chose Thailand (up 1.5 percentage points) and 48% of businesses said they would promote

Since 2018, the growing confrontation between the US and China has spurred investment by Japanese companies in Southeast Asian countries, the report said. More and more Japanese companies are shrinking operations in China and expanding business into Southeast Asia. The gap between Japan's investment capital in ASEAN countries and China increased from more than 10 billion yen in 2017 to 20.4 billion yen in 2019.

However, due to the effects of the Covid-19 epidemic, investment activities of Japanese companies in Southeast Asia were also strongly affected. About 80% of Japanese enterprises doing business abroad forecast a decrease in revenue this year, while also reducing their investment in Asian markets. The amount of Japanese investment in Southeast Asia alone fell 35% in the first five months of this year.

Recently, Japan is also implementing the ASEAN supply chain diversification project to avoid concentrating production activities in a certain country. Accordingly, production activities of some Japanese enterprises, which are concentrated in China, will be partly transferred to ASEAN countries in order to avoid supply chain breakdown due to unpredictable fluctuations such as Covid-19. .

The Japanese Government will select a number of businesses to support their costs in expanding production and business activities to ASEAN countries, including Vietnam. In the first phase, 15 out of 30 Japanese enterprises received funding support, choosing to expand production in Vietnam.


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