Viet Nam should accelerate administrative reform to further lure Japan's investment: JETRO

Speaking in an interview ahead of 2026 New Year, Chief Representative of the Japan External Trade Organization (JETRO) in Ho Chi Minh City Okabe Mitsutoshi acknowledged Viet Nam's resilience and long-term prospects despite intensifying global uncertainties, including the economic implications of reciprocal tariffs introduced by the U.S.

"Stable growth will fundamentally continue," he said, while noting that the Government's 10 percent GDP growth target is "ambitious."

To materialize that goal, Okabe emphasized the need for a synchronized virtuous cycle involving strong exports, market diversification, efficient private investment procedures, scaled-up public investment, inflation control, and—critically—the dynamism of Viet Nam's domestic private sector, as set out in the Politburo's Resolution 68 on private enterprise revitalization.

High expectations for structural reform

Okabe said he was most impressed by the sweeping restructuring of central ministries and local governments, aimed at improving administrative efficiency and enabling deeper structural reform. He also highlighted strong investor anticipation surrounding Viet Nam's four strategic development pillars, defined in the latest Politburo resolutions, especially policies supporting the expansion of the private sector.

"Japan and Viet Nam have become trusted partners, and this relationship will continue to deepen," he said, pointing to the 2023 elevation of bilateral ties to a Comprehensive Strategic Partnership.

JETRO also noted key diplomatic progress in 2025, including former Prime Minister Ishiba's official visit to Viet Nam in April, during which both sides agreed to expand cooperation in semiconductors, digital and green transformation, energy, and to uphold the multilateral free-trade system.

Japanese FDI trend: non-manufacturing leads

According to JETRO's 2024 survey on Japanese firms' overseas operations, released in March 2025, Viet Nam ranked fourth globally among destinations where Japanese companies plan to expand—behind the U.S., China, and the EU—underscoring continued investor confidence.

New investment data for Japan's fiscal year 2024 showed a marked tilt toward non-manufacturing sectors.

By project count, Retail & Wholesale led with 26 percent, while Real Estate dominated investment value at 43 percent, driven by major Japanese retailers. Manufacturing ranked third in project count (19 percent) but second in capital value (35 percent), reaffirming its ongoing importance but relative shift in priority.

Investment consultations received by JETRO in fiscal 2025 suggest this pattern will persist into fiscal 2026, with interest strongest in retail, wholesale, trading, construction, and real estate.

Mega-city merger sends "strategic signal"

Okabe also weighed in on the July 2025 merger that created the expanded Ho Chi Minh City from the former Ho Chi Minh City, Binh Duong, and Ba Ria–Vung Tau provinces. While saying it was too early for a comprehensive evaluation, he praised the strategic clarity the merger provides.

"The new Ho Chi Minh City's population will grow to 14 million. The former HCMC will become a center for high-tech industries, services, and international finance. Binh Duong will focus on high-tech manufacturing, while Ba Ria–Vung Tau will drive marine industries, tourism, renewable energy, logistics and ports. This clear alignment of regional strengths delivers a powerful message to foreign investors and is highly commendable," he said.

To capitalize on the merger's potential, Okabe urged Viet Nam to promote the new city's enhanced development capacity globally and ensure steady execution of industrial plans.

Despite optimism, Okabe reiterated long-standing concerns from Japanese investors: complex administrative procedures, incomplete legal systems, and inconsistent or unfair enforcement, especially in cases where compliant businesses face liability when supply partners dissolve, abscond, or declare bankruptcy./.