UK newspaper, the Financial Times, on July 26 ran an article saying that Vietnam ’s attractive investment environment, especially its cheap labour costs and political stability, are persuading foreign companies to choose it as the best destination in the region for their investments.

According to the article, when Mitsubishi Heavy Industries (MHI) Aerospace was planning to build a factory to assemble wing flaps for the Boeing Aircraft Corporation, it looked around Southeast Asia before setting on what is rapidly becoming the region’s destination of choice: Vietnam .

Hirotaka Masuda, head of the MHI Vietnam, said that MHI Aerospace is taking the same path as more and more companies are choosing, driven by the country’s cheap labour and relative political stability.

A survey of Japanese companies with overseas operations by the Japanese Bank for International Cooperation found that Vietnam beats China and India as having the lowest labour costs.

The Kobe Steel Group has also recently announced a 100 billion JPY (1.1 billion USD) investment in a steel mill and the cosmetics company Shiseido has opened a large factory to supply its distribution network in Southeast Asia and China .

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

The total foreign direct investment into Vietnam hit 9.8 billion USD last year, down from 11.5 billion USD in 2008 but still significantly better than many experts had predicted during the height of the global economic crisis.

The relatively stable level of foreign investment, along with the economic momentum Vietnam had built up gong into the crisis helped the economy continue growing at 5.3 percent in 2009.