Despite a decline in projects, Japan remains the second largest investor in Vietnam.
Japan is the second largest foreign investor in Vietnam with a total of 2,584 projects and an investment capital of $37.4 billion, according to data from the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment (MPI).
The figures also showed that South Korea remains Vietnam's largest foreign investor with 4,279 projects and investment capital of $38.1 billion.
Investment activity by Japan has declined because of the economic difficulties in the country and because of the global economic downturn since 2011. The data from Japan External Trade Organization (JETRO) showed that in 2014, 436 investment projects from Japan were licensed to operate in Vietnam, the lowest level in the past three years.
Total registered capital was more than $2 billion which has halved from two years ago. Notably, the manufacturing sector, which accounts for the largest proportion of investment projects in Vietnam, was reduced to 53 projects and nearly 30 per cent of capital, from $1.2 billion in 2013 down to $830 million in 2014.
Experts said one of the reasons is that projects in manufacturing require high investment, are time-consuming and highly dependent on the demands of the market.