Fire Horse Year to strengthen Viet Nam-Japan economic partnership in New Era

Remarkable GDP growth rate

The most notable highlight of Viet Nam's economy in the Year of the Snake 2025 was its remarkable 8.02 percent GDP growth, the highest in Southeast Asia.

This achievement reflects the rapid reform momentum under the leadership of General Secretary To Lam. The Politburo adopted four strategic resolutions focusing on science and technology and innovation, private sector development, international integration and legal-institutional reform. These reforms lay the institutional foundation for Viet Nam's target to achieve double-digit growth over the next five years and move toward a high-income developed country.

In 2025, numerous large-scale infrastructure projects were launched or completed throughout Viet Nam. In celebration of major milestones, Viet Nam hosted ceremonies for 80 projects on the occasion of the 50th Anniversary of National Reunification in April, 250 projects on the occasion of the 80th National Day in August, and 234 projects to celebrate 14th National Party Congress in December across the country. Japan has actively contributed through cooperation in both public and private sectors, including the North Ha Noi Smart City, the Yen Xa Wastewater Treatment Plant (ODA), the O Mon 4 Thermal Power Project and others. Japan remains committed to making the most use of its expertise to support Viet Nam's development.

As Viet Nam achieves unprecedented levels of development over the next five years and puts forward further reforms, there is no doubt that this trend will bring Japanese companies significant opportunities to expand their businesses.

The Ambassador was convinced that there remains vast potential for Japanese firms to leverage their strengths and contribute to Viet Nam's growth.

Last year, Prime Minister Pham Minh Chinh held dialogues with Japanese enterprises in March and August, reaffirming his commitment to resolving the challenges the companies face. Concrete improvements in administrative procedures have been seen as a result of these dialogues, including revisions to regulations on manufacturing license renewals using machinery over 10 years old, and reform on the Economic Needs Test (ENT) for foreign retailers which required foreign retailers to undergo prior screening for every new store opening.

Although these progresses have been made, some challenges remain, such as regulations on gasoline-powered motorbikes in Ha Noi and the outstanding payments for the construction of Ho Chi Minh City Metro Line 1, a project awarded to Japanese companies. It is crucial that the investment climate be improved through further procedural reforms, while simultaneously addressing these remaining issues. "Moving in this direction will lead to an expansion of Japanese investment in Viet Nam," said Ambassador Ito Naoki.

Japan appreciates Viet Nam's commitments to institutional reforms

Japan welcomes the rapid reforms facilitated by General-Secretary To Lam. Viet Nam undertook significant administrative restructuring of ministries and party organizations in March 2025, and conducted reorganization of local administrations in July of the same years, reducing the number of provinces and cities from 63 to 34. The introduction of a two-tier local government model is expected to enhance decentralization, streamline administrative procedures, and accelerate the speed of decision-making. We highly appreciate Viet Nam's commitment to institutional reforms through strategic resolutions.

"Furthermore, as mentioned earlier, we highly commend the promotion of institutional reforms through strategic resolutions, said the Ambassador".

Japan expects to see the implementation of concrete measures in line with the pillars of the reforms, such as science and technology, innovation, development of the private sector, international integration and the legal institutional reform.

Over the next five years, Viet Nam is expected to achieve an unprecedented level of development.

As the "second act" of reforms under General Secretary To Lam begins, Japan looks forward to these major transformations entering the implementation phase. This will bring a prime opportunity to further strengthen the economic partnership between Japan and Viet Nam. The Ambassador expects to see progress in simplifying administrative procedures, accelerating the approval process, delegating authority, and effective utilization of ODA, leading to the improvement in investment climate.

Japan's investment in Viet Nam reached $3.1 billion (USD) in 2025, a 20 percent increase from the previous year and bringing the cumulative investment of approximately US$80 billion. In the manufacturing sector, Toyota invested approximately US$400 million toward the production of hybrid vehicles. As for the industrial park supporting the manufacturing sector, Thang Long Industrial Park invested about US$100 million in Thanh Hoa Province. In the retail sector, which enhances the daily lives of Vietnamese citizens, AEON MALL invested a total of approximately US$500 million in Can Tho City and Dong Nai Province. The annual bilateral trade between Japan and Viet Nam has increased 1.8 times over the past decade, reaching almost US$50 billion. More than 2,000 Japanese companies operate in Viet Nam, and according to the JETRO survey, about 70 percent expect to be profitable, and roughly 60 percent plan business expansion within the next 1-2 years. Viet Nam has ranked first in ASEAN for two consecutive years in terms of Japanese companies' eagerness for business expansion. Ito said he expects to see further expansion of trade and investment between the two countries.

New pillars of bilateral cooperation

For over 30 years, Japan has fostered Viet Nam's supporting industries through sharing and transferring knowledge and technology to Viet Nam, contributing to the development of the Vietnamese manufacturing sector including small and medium-sized enterprises (SMEs). Japan believes that these expertise and experiences are becoming more vital now than ever.

In order for Viet Nam to pursue economic restructuring, high-tech industry development and enhanced competitiveness, AI, innovation, semiconductors, DX (Digital Transformation), and GX (Green Transformation) will be the key sectors. During his visit to Viet Nam in April 2025, Prime Minister Ishiba Shigeru agreed with the Vietnamese leaders to establish these advanced fields as the new pillars of bilateral cooperation.

Prime Minister Takaichi Sanae, since the very start of her administration, has also reaffirmed the commitment to further strengthening bilateral cooperation under the Japan-Viet Nam Comprehensive Strategic Partnership for Peace and Prosperity in Asia and the World (CSP). Concrete results have already been observed.

In the semiconductor sector, Viet Nam has set a target to train 500 doctoral students by 2030. Japan has announced its commitment to hosting approximately 250 of these students—half of the target—through international joint research programs. Joint research between Japanese and Vietnamese universities has already commenced, with five projects selected in the first call for proposals, through which 63 doctoral students are expected to be hosted. Second and third calls for proposals are also at the preparatory stage. Furthermore, at the Viet Nam-Japan University (VJU) established by Japan and Viet Nam, 106 students are currently enrolled in the "Semiconductor Chip Technology Program," which was launched last October as the undergraduate course.

Furthermore, JICA's AI research and human resource development program has been implemented since January last year. From September to December last year, Professor Yutaka Matsuo of the University of Tokyo held a series of lectures at Ha Noi University of Science and Technology (HUST). These lectures aimed to foster talent interested in entrepreneurship and solving social issues through AI. Approximately 300 HUST students attended in person, while about 1,600 participants across Viet Nam and over 7,700 people from 33 countries worldwide joined online. In the agricultural sector, Memorandums of Understanding (MoUs) have been signed between Japanese startups and the Vietnamese government and private companies, and projects for facilitating Green Transformation (GX) are currently in progress in accordance with the MOUs.

In these advanced sectors, Japan will continue to fully utilize public and private sector funding and technology, and contribute to the human resource development and industrial growth of Viet Nam.

Following the successful conclusion of the Communist Party Congress, Japan believes that reforms will be further facilitated under an even stronger national leadership, bringing further expansion of the economic relationship between Japan and Viet Nam.

Furthermore, to support Viet Nam's sustainable development, Japan plans to advance cooperation in the field of climate change. Through the Asia Zero Emission Community (AZEC), Japan has selected 15 pilot investment projects totaling approximately US$20 billion, centering on LNG power generation and other renewable energy projects. To accelerate this momentum, it is essential to ensure the institutional framework that allows for appropriate recovery from investment cost during the long-term project operation. Also, to promote policies for greenhouse gas reduction and disaster management against frequent typhoons in recent years, we plan to establish a program loan exceeding US$300 million.

Japan also expects to promote cooperation in the field of security. Japan welcomes Viet Nam's commitment to "strategic self-reliance" in diplomacy and international integration, alongside national defense and security. At the end of last year, Japan and Viet Nam held the first Foreign and Defense Vice-Ministerial "2+2" meeting in Tokyo. This year, Viet Nam is scheduled to chair the CPTPP and next year it will chair APEC. Japan will support Viet Nam in strengthening cooperation in diplomacy and security, and in playing further active role for the peace, stability, and sustainable growth of the international community.

The CSP is a partnership "for Peace and Prosperity in Asia and the World." As partners, Japan places great importance on working together to contribute to the realization of a Free and Open Indo-Pacific (FOIP). During his visit to Viet Nam this January, Minister for Internal Affairs and Communications Hayashi Yoshimasa met with Prime Minister Pham and reaffirmed that cooperation between our two nations under the CSP can be developed infinitely.

People-to-people exchanges and promotion of mutual understanding through culture also form the foundation of our bilateral relationship. In 2025, 810,000 Japanese nationals visited Viet Nam, and 680,000 Vietnamese visited Japan. By 2030, Japan targets to achieve a total of 2 million as the number of Vietnamese people visiting Japan and Japanese visiting Viet Nam. While the number of Vietnamese residents in Japan has increased by more than 500,000 over the past decade, Japan will continue to improve the environment to ensure that Japan remains an attractive destination for the Vietnamese studying and working in Japan. 

"Princess Anio," a story depicting the romance between a Japanese merchant from Nagasaki and a Vietnamese lady, was performed as an opera in 2023 to commemorate the 50th Anniversary of Japan-Viet Nam Diplomatic Relations. Following this success, a musical version of the story is currently in preparation and is scheduled to be performed at the Kanagawa Arts Theatre in September this year, featuring a double cast for the lead role of Princess Anio by a Japanese actress and a Vietnamese actress. Furthermore, the movie-making of the story by a Vietnamese director is also underway. The Ambassador is deeply moved that this tale from 400 years ago continues to be cherished by the people of both nations as a symbol of Japan-Viet Nam historic exchanges and mutual understanding.

"Horse Returns, Success Comes"

On the threshold of the Lunar New Year, the Ambassador said "I wish you all "Mã đáo thành công" (Success arrives with the horse).

The horse is a symbol of overcoming hardships to achieve our goals. In Japan, this year is "Hinoe-uma" (Fire Horse), which occurs only once every 60 years. It is considered a year of energetic fortune, where the seeds of reform and new success take root. I am certain that the energy of the Fire Horse will drive reforms forward and further strengthen the economic partnership between our two nations in this "New Era."

Under the leadership of General Secretary To Lam, the Ambassador is confident that the reforms will be accelerated and the bonds between the companies of Japan and Viet Nam will grow even stronger.

"Each and every one of us looks forward to seeing further development of Viet Nam!" the Ambassador stressed./.