HCM City (VNS/VNA) - Vietnamhas some great advantages while competing with regional countries in attractingcapital flows after the COVID-19 pandemic, experts have said.

A report by SSI Research saidforeign projects set up in industrial parks in the country were up 32 percentyear-on-year in the first four months of the year to 9.8 billion USD.

The pandemic has shown thatmany large countries’ supply chains are heavily dependent on China, and theyhave taken drastic steps to cut this dependency.

Many large US, Japanese andEuropean companies are gearing up to shift production away from China. Vietnamis one of their destinations besides some others in the region such asIndonesia, Thailand and Malaysia.

"Compared to Indonesia,which directly competes with Vietnam in attracting FDI, Vietnam has theadvantage of proximity to China,” the report said.

“Vietnam also offers support tobusinesses, with many incentives for large FDI projects, and has a lot of freetrade agreements in which Indonesia does not participate. Recently theVietnamese dong has been very stable compared to the Indonesianrupiah."

Nguyen Van Toan, Vice Chairmanof the Vietnam Association of Foreign Investment Enterprises, said theopportunity to attract the FDI wave looking to relocate from China is quiteclear, but not really big, and whether the opportunity can be grasped dependslargely on Vietnam.

"We also need to be awarethat investors will not easily pull out all investment from China because thatcountry has great advantages such as a strong work force, good use oftechnology and products for all market segments, not just the affordablesegment."

Vietnam would face difficultiesin competing with so many rivals to attract a part of the capital flows movingout of the neighbouring country, he said.

Experts agreed that to competein the race, the country would need to change its way of attracting FDI andquickly.

Phan Huu Thang, former Directorof the Foreign Investment Agency, said, “[We] will fail if we try to attractforeign investment in the traditional way.

“For example, India hasimmediate policies to allocate land, prepare infrastructure, identify potentialinvestors to approach, announce tax reduction plans ... Investors are gearingup to shift their production. If we continue to act slowly, we will miss anopportunity that comes once in 100 years.”

Toan said Vietnam needed tofurther improve its business and investment environment and administrativeprocedures.

He believed that HCM City,which leads the country in FDI attraction, has all the conditions and capacityrequired to make good use of this opportunity./.