Japan's PM visits Vietnam to revive slowing investment ties

Japanese Prime Minister Sanae Takaichi arrives in Hanoi today for high-level talks with Vietnam’s leader To Lam. The visit aims to strengthen ties between the two nations as Japanese investment in Vietnam slows down.

Both sides will focus on expanding their Comprehensive Strategic Partnership, covering energy, technology, and regional stability during the discussions. Takaichi’s schedule includes a meeting with Vietnamese counterpart Le Minh Hung. She will also deliver a speech at Vietnam National University. Key topics will include the business environment in Vietnam and the hurdles faced by Japanese firms operating there.

Japan remains one of Vietnam’s top foreign investors, though new investment pledges dropped sharply in early 2024. Figures show a 75% decline in the first quarter, falling to US$233 million compared to the same period last year. Despite this, bilateral trade rose by 12.3%, reaching US$13.7 billion.

Energy cooperation has faced setbacks, with Japan withdrawing from a Vietnamese nuclear project last year. The decision followed delays caused by a tight construction timetable. Meanwhile, Vietnam is reviewing a proposed ban on petrol-powered motorcycles in Hanoi, a policy previously opposed by Honda, a major Japanese manufacturer. The talks come at a time when economic cooperation between the two countries is shifting. While trade has grown, Japanese investment has slowed, prompting discussions on improving conditions for businesses. Both nations are looking to reinforce collaboration in critical sectors like technology and energy.