An article in the UK’s Financial Times newspaper on Monday said foreign companies were choosing Viet Nam over other countries in the region because of its attractive investment environment, cheap labour and political stability.

The newspaper said Mitsubishi Heavy Industries (MHI) Aerospace was planning to build a factory in Viet Nam to assemble wing flaps for the Boeing Aircraft Corporation after looking at other countries in Southeast Asia.

Hirotaka Masuda, Head of MHI Viet Nam, said other firms were likely to follow suit.

A survey by Japanese Bank for International Co-operation of Japanese companies with overseas operations found that firms thought Viet Nam was more attractive than China or India because of its lower labour costs.

The Kobe Steel Group also recently announced that it planned to invest 100 billion yen (US$1.1 billion) in a steel mill, while cosmetics company Shiseido has just opened a large factory to supply Southeast Asia and China.

Sapporo, a Japanese beer producer, plans to open a brewery in Viet Nam in 2012, while Daiwa Securities has launched a 40 billion yen investment trust that will allocate two-fifths of its assets to Viet Nam.

Total foreign direct investment in Viet Nam hit $9.8 billion last year, down from $11.5 billion in 2008 but significantly better than many experts had predicted during the height of the global economic crisis.

Stable foreign investment, along with the economic momentum that Viet Nam built up going into the global economic crisis, helped the economy grow 5.3 per cent in 2009.