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Economy

Japan relationship promises security with growth

HANOI -- Vietnam sees Japan as a key ally that can serve as a counterweight to an assertive China.

     President Truong Tan Sang told The Nikkei he had high hopes for cooperation with Japan in agriculture. He also noted the importance of Japanese investment for Vietnam.

     Japan accounted for more than a quarter of the Southeast Asian nation's total direct overseas investment. Attracting Japanese corporations is a crucial part of its strategy for expanding exports, Sang said.

     Vietnam too has territorial disputes with China over islands in the South China Sea. It sees an advantage in pursuing ties with Japan, which is entangled in its own protracted row with Beijing over the Senkaku Islands, known as Diaoyu in China.

     Japan is set to provide patrol ships to Vietnam at Hanoi's request as part of an initiative to deepen defense and security ties.

     Pitfalls lie ahead. A plan to build a nuclear power plant in Vietnam with Japanese support has faced delays. Vietnam has been slow to pass necessary legislation, and personnel training has lagged behind. Neither the manufacturer nor the type of reactor has been decided yet. Negotiations over financing of the project have yet to begin.

     Japanese companies moving into Vietnam have complained about restrictions on foreign capital and bureaucratic opacity. Sang said that he will work to improve Vietnam's economic system. If the country does not move quickly, however, Japanese and other foreign companies may decide to take their business elsewhere.

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