Vietnam attracts Chinese firms in energy production: Savills

Vietnam, especially the North, is attracting Chinese businesses, especially companies in the field of energy production thanks to its proximity to China and competitive industrial land prices compared to the South, according to associate director, head of industrial services at Savills Vietnam John Campbell.

Campbell stated that with the North’s advantages, the region holds a unique attraction for Chinese investors. Moreover, the high level of economic integration in Vietnam is significant. Vietnam has built economic and trade links with over 224 partners from various countries and regions throughout the world. This generates favorable conditions for Chinese enterprises in Vietnam to grow their market presence.

The country also boasts an ample workforce, including a skilled labour force, and offers highly competitive labour costs. The government has introduced tax incentives and a clean energy strategy to attract foreign investors.

According to Savills Vietnam, top Chinese solar companies have been expanding in Vietnam in recent years, not only to reach the Southeast Asian market, but also to utilize it as a springboard to more readily participate in the European and American markets. Among them, Trina Solar, one of the largest solar panel producers by sales globally, invested in its third factory in Thai Nguyen with an estimated cost of $420 million.

However, according to Campbell, in order to meet the growing demand for manufacturing units, industrial zone developers in Vietnam must increase the quality of industrial parks and ready-built factories. Beyond rental pricing, industrial parks and ready-built real estate developers should emphasize high-value-added services and incentives.

Simultaneously, Vietnam must continue to invest in infrastructure and develop the capabilities of Vietnam's workers in order to boost productivity and efficiency.

Mainland China has been one of the five largest investing countries in Vietnam over the last five years. Data from the Ministry of Planning and Investment shows that investors from China poured $3.38 billion in Vietnam in the first ten months of this year, ranking fourth after Singapore, South Korea, and Hong Kong.

In terms of trade, China is currently Vietnam's largest trading partner. Vietnam's trade with China reached $175.6 billion in 2022 and $138.9 billion in the first ten months of this year.