Mr Hai said that the focus will be on building an industrial zone for Japanese businesses. In addition to special preferential policy, they will be subject to given space, clear procedures and proper infrastructure.

Tsuneo Hayashi from a Japanese consultant company said if the initiative comes true Japanese small-medium-sized enterprises (SMEs) which have difficulty investing overseas due to a lack of experience and human resources can set up factories in Ho Chi Minh City.

Mitamura from Nidec Company said the city should offer other incentives for SMEs, especially in support industry. He added that Vietnam has just provided incentives for big companies in high-tech industry.

Mitamura cited a number of difficulties faced by Japanese businesses such as incomplete infrastructure, unstable power source and inadequate labour supply. However, Vietnam is still an attractive destination for Japanese businesses thanks to its political stability, good geographic position, young population and industrious workers.

Economic experts said as many Japanese businesses plan to move their factories overseas. This is a good opportunity for Vietnam in general and Ho Chi Minh City in particular.