Construction of the Vietnam-Japan technology park has begun in Ho Chi Minh City as part of efforts to improve the country's poor supporting industry about which Japanese investors have been complaining.
The 100-hectare Vie-Pan Techno Park in the Hiep Phuoc Industrial Zone will be developed in two phases at a cost of US$31 million.
Twenty five Japanese firms have already registered to set up plants in the park.
At a meeting between city authorities and Japanese business executives a few days earlier, city chairman Le Hoang Quan said HCMC is now focused on strengthening its supporting industry since Japanese investors have evinced great interest in setting up businesses there.
It plans to improve the business environment, infrastructure, and workforce, he said, adding that it would urge the Ministry of Transport to start more flights between the city and Japan.
Hirotaka Yasuzumi, managing director of the Japan External Trade Organization (JETRO), said more and more Japanese firms have been expanding their business in Vietnam, but see the weak supporting industry as their biggest challenge.
A JETRO study found that for Japanese firms Vietnam is the second most difficult place to do business behind Myanmar.
The ratio of Japanese firms’ use of local parts in Vietnam is just 28 percent, or half the rates in China and Thailand, the study showed.
This raises concern about high input costs among firms, who have already complained about tax policies and the lack of skilled workers and information, it said.
Yasuzumi said that to become a regional manufacturing hub, HCMC needs to develop its supporting industry.
The city and neighboring localities have only seen the development of foreign supporting firms, he said, adding that facilitating the improvement of domestic businesses is important.
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