After its accession to the WTO as its 150th member in January this year, Vietnam agreed to lower import tariffs and open its market to foreign businessmen, thus opening the door to numerous trade opportunities for Taiwanese manufacturers, said Chiu Po-ching, director-general of the MOEA’s Industrial Development and Investment Center.

Moreover, the Vietnamese government has brought an end to export subsidies on farm products, and the textile export quota for Vietnam has also been eliminated since its WTO entry, Chiu pointed out, adding that the Southeast Asian country also agreed to open up its service industries, such as computer and telecommunication services, as well as banking, insurance and securities services.

Chiu also disclosed that several domestic financial institutions, including Cathay Financial Holding Co., Hua Nan Commercial Bank and Chinatrust Commercial Bank, are bidding to opening branches in Vietnam, while a number of insurance companies are waiting for the Vietnamese government’s final approval to make inroads into that country.

Touching on Taiwanese manufacturers’ future investment in Vietnam, Chiu said domestic entrepreneurs are well-suited to invest in such sectors as electronics, information technology, textile, car making and related parts and components.

However, Chiu suggested that domestic manufacturers intending to invest in Vietnam should conduct risk evaluations before carrying out their investment projects, due to the lack of infrastructure, skilled labor, and as yet incomplete industrial supply chains in certain areas.

According to official statistics, the accumulated amount of investment by Taiwanese manufacturers in Vietnam had reached approximately US$8.26 billion as of December 2006, making Taiwan the largest foreign investor in the Southeast Asian nation.

Nevertheless, investors from elsewhere are taking advantage of opportunities in Vietnam. In 2006, new Taiwanese investment in Vietnam amounted to US$226 million, ranking ninth among foreign investors, far behind those from South Korea (US$2.83 billion), Hong Kong (US$1.23 billion), Japan (US$1.04 billion) and the United States (US$780 million).