Nakajima said the Japanese Government has launched a program to help Japanese firms diversify their supply chains in ASEAN member countries. As many as 30 enterprises have registered for the program, 15 of them want to open factories in Vietnam, he added.

Due to the far-reaching effects of the COVID-19 pandemic worldwide since February, the supply chains for the automobile, mobile phone and machinery industries have been disrupted, resulting in a shortage of components, he elaborated.

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Vietnam is attractive to Japanese firms. Photo: tuoitre

The Japanese Government is encouraging companies to diversify their supply chains to avoid dependence on a single market, he said, adding that each business joining the program will receive a maximum grant of 5 billion JPY (47 million USD).

Explaining the reason why Vietnam is attractive to Japanese firms, Nakajima said the Vietnamese Government’s dedicated effort to draw Japanese capital is a crucial factor.

Another Vietnam’s advantage is the fact that a large number of its workers are fluent in Japanese language though those from Malaysia and the Philippines have better English skills.

According to the JETRO official, a 95 million population along with improving living conditions will soon turn Vietnam into an attractive market. Apart from exports, Japanese goods made in Vietnam could also cater to the host country.

However, he also noted that as Vietnam’s labour and land lease costs have been rising over the years, it will gradually soon lose low-cost advantages. Moreover, the country also should develop its supporting industry to raise the rate of locally-made products.

Source: VNA