China speeds up investment in Vietnam

An upward trend has been recorded in recent China's recent investments in Vietnam, which is hoped to help fuel the industries the Southeast Asian country has demand for such as high technology, renewables, supporting industries, electronics, and green finance.

More than $11.07 billion in foreign investment was registered in Vietnam during the first five months of 2024, up 2% year-on-year, according to the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment.

Singapore ranked first during the period, with nearly $3.25 billion registered, accounting for 29.3% of the total and increasing 28.2% year-on-year. However, it was China who took the lead in the number of new projects that make up 28.3% of the total.

Between January and May, Chinese investors channelled $1.126 billion into 347 new projects, 55 existing projects, and 172 capital contributions/share purchases.

In 2023, Chinese investors registered $4.47 billion in investment capital, soaring 77.6% from the previous year. The sum was earmarked for 707 new projects, 179 existing ones, and 412 capital contributions/share purchases.

Minister of Planning and Investment Nguyen Chi Dung also underscored an upward trend in Chinese investments in Vietnam. Notably, many international-level enterprises of China in such areas as technology, electricity-electronics, processing, manufacturing, infrastructure, renewable energy, and electric vehicle have come to the Southeast Asian nation.

The 2023 Provincial Competitiveness Index (PCI) and Provincial Green Index (PGI) report reserved a section for the investment trend of China. It said Chinese investors have been seeking opportunities in Vietnam since 2019 amid the China-U.S. trade tension and a growth slowdown in the world’s second biggest economy.

Chinese investment into Vietnam surged to $4.47 billion in 2023 from $2.92 billion in 2021, according to the report.

Minister Dung emphasized selective investment and stronger ties between foreign and domestic sectors, promoting a digital, green, circular, and knowledge-based economy. Vietnam invites Chinese investors in high tech, renewable energy, supporting industries, electronics, electric vehicles and batteries, infrastructure, financial centers, green finance, smart cities, eco-industrial parks and free trade zones.

These are the industries matching China’s experience and strength as well as Vietnam’s demand and potential, he continued, voicing his hope that Chinese investors will step up technology transfer and help local firms improve production capacity so that Vietnamese businesses can engage more deeply in global value chains.